The Importance of Objectivity and Independence of Auditors

Running head: AUDIT AND ASSURANCE
Audit and assurance
Name of the Student
Name of the University
Author Note

AUDIT AND ASSURANCE
Table of Contents
Introduction:...............................................................................................................................2
Discussion:.................................................................................................................................2
Defining the objectivity and independence as applicable to auditor:........................................2
Discussing the prominence of independence of auditor in the auditor-client relationship:.......2
Explaining the types of threat and analysing the possible consequences of identified threats:. 2
Recommending the steps to reduce the auditor’s objectivity:...................................................2
Conclusion:................................................................................................................................2

AUDIT AND ASSURANCE
Introduction:
The paper addresses the importance of objectivity and independence of auditors in the
auditor client relationship. The given five circumstances in the paper is analysed for
identifying and explaining the kind of threat created by such circumstances. In addition to
this, the possible consequences of such threats to the outcome and conduct of audit are
analysed. The later section of the paper demonstrates the recommendation for reducing the
threats to the objectivity of the auditors according to the given circumstances. Threat to the
performance of the auditors can be classified as threat to independence and threat to
objectivity. It is important to evaluate the existence of any threat whether such threat is
significant or not, In the event of existence of any such threats, it is important to either
eliminate such threats or lower them to a level that can be accepted by designing appropriate
safeguards (Mukhlasin 2018).
Discussion:
Defining the objectivity and independence as applicable to auditor:
Independence of the auditors can be defined as the expectation out of the auditors of
providing professional and unbiased opinion on the work audit is performed. This implies
that then professional judgement exercised by the auditors should be free from all the
financial, economic and other relationships. Independence is the independence of appearance
and independence of mind. Independence of mind would allow the auditors to act with
integrity and professional scepticism and is not influenced by any opinion results in
comprising professional judgement. Freeing the professional judgement from all economic
and financial relationship in the audit client relationship is not possible. It is therefore
required to evaluate the significance of such relationship in light of the informed party
making a conclusion to be unacceptable (Baldacchino et al. 2017).
Objectivity is a basic attitude and character of auditor that helps in conducting audit in
a manner that their work quality is not compromised and the judgement made by the auditors
should not be subordinated on the work of others. An obligation is imposed on the
professional accountants to not get influenced by any conflict of interest, biasness and undue
influence in making professional judgement. The motivations and reason behind certain
decision of auditors is accounted or governed by the objectivity. Rather than a list of
prohibitions, it is concerned with the process of internal thought.