Independence of external auditor
By:- shubham kanchhal Auditor independence refers to the independence of the auditor from parties that may have a financial interest in business being audited. Independence requires integrity and an objective approach for the audit process. This concept requires the auditor to carry his work freely and in an objective manner. The purpose of an audit to enhance the credibility of a financial enhancements by providing reasonable assurance from an independent source that present a true and fair view in accordance with an accounting standard. This objective will not be met if users of the audit report believe that auditor may have been influenced by other parties, more specifically company directors or by conflicting interests. In addition to the technical competence, auditor independence is the most important factor in establishing the credibility of an audit opinion. The role of an external audit is to ascertain that the financial statements that are communicated to external stakeholders are a 'true and fair' representation of both performance and their position. In doing this, they provide comfort to external users of these statements that what they are reading has been prepared in accordance with all the accounting and other mandatory and professional requirements. The onus of being able to read and interpret the information contained in the financial statements rests with the users, and no interpretation of the information is required by the auditors. Independence of the external auditor means independence from the parties that have an interest in the results published in financial statements of an entity. The support from and relation to the audit committee of the client company, the contract and the contractual reference to public accounting standards or codes generally provides independence from management, the code of ethics of...
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