Write short notes on the Independence of auditor

Auditing and Assurance Revision Questions and Answers

The audit is governed certain principles and ethics.
When an auditor expresses his opinion on the financial statements, the financial decisions of the users of the financial statements are at stake. Vital financial and investment decisions are taken relying on the auditor‟s report.
The principle of independence highlights true nature of an auditor‟s function and forms essence of an audit.
An auditor has to form his opinion based on evidences not on any preconceived notions. An auditor‟s opinion should not be influenced personal prejudice or bias.

He should be or appear to be free of any interest which might be regarded whatever its actual effect, as a barrier to his independence.
Thus, the auditor should be independent of the entity under audit both in fact and appearance that is he should be independent in reality and other should not doubt his independence. Though there are legal provisions and code of ethics illustrating the independence of an auditor, the underlying basic principal is that an auditor should not have any financial and other interest or any presence or relation in the management of the entity under audit to preserve his independence.



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