Auditor independence is the cornerstone of the accounting profession. Auditors’ commitment to follow the standards set forth by the American Institute of Certified Public Accountants (AICPA), the Securities and Exchange Commission (SEC), and the International Auditing and Assurance Standards Board (IAASB) ensures stakeholders can trust that audited financial statements present an accurate picture of the performance and condition of companies.
Close-up on AICPA standards
Auditors of U.S. publicly traded and privately held companies must be members of the AICPA. According to AICPA standards, “Accountants in public practice should be independent in fact and appearance when providing auditing and other attestation services.” Specifically, the Professional Ethics Division of the AICPA defines independence as, “The state of mind that permits a member to perform an attest service without being affected by influences that compromise professional judgment, thereby allowing an individual to act with integrity and exercise objectivity and professional skepticism.” In short, auditors can’t provide any services for an audit client that would normally fall to the company’s management to complete. Auditors also can’t engage in any relationships with their clients that would:- Compromise their objectivity,
- Require them to audit their own work, or
- Result in self-dealing, a conflict of interest or advocacy.
