Most of the inquest into major auditing failures during the
last decades or so aroused certain questions about the independence of the
Independence has become an emotive word which stands for
freedom, integrity and all that is good. Years back, auditors were often
required to hold shares in their client companies so as not to be too
independent. However, the qualities of independence is free, unhindered,
emancipated or liberated and free from dominance or influence.
Professional independence is a concept fundamental to the
accountancy profession. It is essentially a way of thinking of the mind
characterized by integrity and objective approach to professional work.
Accountants believe that the process of accountability is incomplete without an
audit; which off course can only be meaningful if the person performing it is
The auditor should be an independent person who is appointed
to investigate the organization, its records and the financial statements. The
primary aim of an audit is to produce a report of his opinion of the truth and
fairness of the financial statements, so that any person reading and using them
can have belief in them.
Essentially, the major value of an audit depends to a large
extent on the degree of confidence reposed in it by the public and therefore,
it is a fundamental principle that not only must the auditor be independent in
fact and attitude of mind but he must also be seen to be independent that is
appearance of independence and there are many stakeholders in this issue: It is
no surprise therefore, that the appearance issues has proved to be the key
point in the discussion of the auditors independence.
It is worthy of note that the questions relating to the
effective independence of the auditor started to arise at the inception of the
company form of business in the early 17th century. This steadily expanding
influence of the auditor arose from the increasing complexity of the modern
industrial world, and its greater emphasis on accountability. However, the
recent business failures caused by management illegal acts like in the case of
“a bank being certified healthy today by an auditor and going into liquidation
in less than a financial year”, has created a growing atmosphere of criticism
about auditors’ independence.
Factors that had lead to this include:
Firstly, increasing competition among firms for audit
appointment has presented an image of auditors fighting for directorsfavour.
Secondly, the growth of non-audit services has created a
suspicion that auditors’ independence might be sacrificed for the sake of
obtaining a non-audit work.