All 18 Ethics & Independence questions
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What are the fundamental principles of professional ethics for auditors? What is a self-review threat, with an example? What is confidentiality and when can it be overridden? What is objectivity and how does it differ from independence? What is integrity in the context of auditing? What are the main threats to auditor independence? What safeguards can mitigate threats to independence? How do audit fees create threats to independence? What is a familiarity threat and how is it managed? How does the conceptual framework approach to ethics work?
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Auditing & Assurance › Ethics & Independence

What is auditor independence and why is it essential?

Beginner

Answer

Independence is the auditor's freedom from relationships or interests that could compromise, or appear to compromise, professional judgment—comprising independence of mind (actual objectivity) and independence in appearance (avoiding circumstances a reasonable observer would think impair objectivity). It's essential because the value of an audit rests on users trusting the auditor's impartiality.
Real-world example An auditor sells shares in a client before the engagement to preserve both actual and perceived independence.

Common follow-ups: What are the two dimensions of independence? | Why does appearance matter?

Audit Objectives & Types ISA Standards Ethics & Independence
All 18 Ethics & Independence questions