The independent of an auditor refer to the external auditor or the internal auditor independence from the third party who may have the financial interest in the organization being audited. To be independent one requires being a person of integrity and approach audit process in an objective manner. The concept of independence requires the auditor to carry out his duty in a fair manner and free from any influence. Independent also describes the freedom of an auditor to take his or her audit functions in an unbiased manner. To achieve the require degree of independence effectively the auditor should not have any restriction when carrying his duty either from management or any stakeholder of the business CITATION Pic10 \l 1033 (Pickett 2010). Objectivity refers to any unbiased from the auditor and ensuring that he does not engage in any form of compromise in his work. The threat to the auditor independence and objectivity should be managed from individual level, functional organizational, management and engagement level. To achieve independence and objectivity in their profession auditors must observe set guidelines or the fundamental principles.
The fundamental principles include:
Integrity
The auditor should be honest and straightforward in performing his or her duties. Integrity does not only referred to honesty but truthfulness and t fair dealings. The principle objectivity principle requires all auditors to be intellectually trustworthy, honest, and fair and should not have conflicts of interest. The auditor should avoid being party to any activity that is not legally accepted or engaging or even engage in activities that are not accepted for the professional service. It is, therefore, the responsibility of an auditor to ensure that all information he provides are true and can be relied on.
Professional due care and competence
Accountants and auditors should carry their professional responsibilities with due diligence, skill, care and have the desire to maintain and improve their professional skills and knowledge at the required level to ensure the employer or client benefit from the competent professional service provided based on up to date development in skills, legislations, practice and techniques. Auditors should not pretend to have experience or expertise they do not have. Professional competence includes attaining of professional expertise and maintaining of the professional competence CITATION Fio13 \l 1033 (Fiolleau and Sunder 2013). The auditor will not work independently by the mere fact he or she has attained the professional skill, but there is a need to continuously develop the skills acquired.
Confidentiality
The auditor should treat all the information of the client received in the course of carrying out their professional responsibly and not disclose or use the information without having the consent of the customer unless there is professional or legal duty or right to disclose. The confidentiality obligation continues even after the engagement between the auditor and client is terminated. The auditor gets access to vital information of the customer, and hence he or she has the duty to safeguard such information. The information should be disclosed only when there is authority from the client. The other instant when disclosure is relevant is when there is legal requirement to disclose the information when there is a professional right or duty to disclose such information.
Professional behavior
The auditor should behave in a manner that is consistent with the sound image of the auditing profession and avoids any conduct or behavior that may bring shame to the accounting profession. Auditors are required to consider the obligation of the accountant and auditor to the client or employer, third party, staffs, public and other members of the accounting profession. The auditor should ensure that he or she carries himself in an ethical manner to make sure the reputation of the profession is not discredited.
Technical standard
The auditor should perform his or her professional work according to the set technical and professional standards. Accountant and auditors have an obligation to deliver their professional services with care and skills, the requirement of the employer or client as far as they are in agreement with the requirement of objectivity, integrity, and line with the professional accountant in the public practices. They should also conform to professional and technical standard as provided by international auditing standard( IAS) and other existing legislation.
Objectivity
The auditor is required to demonstrate professional objectivity in collecting, evaluating, presenting and communicating the information regarding the work or the work being audited. The auditor should, therefore, make independent investigation without the influence of his interest. Objectivity helps the auditor to make the unbiased judgment and hence increasing the confidence of the client regarding the work presented. To ensure this is achieved the auditor should not engage in any relationship or activity that may presume or suggest that he or she is biased in his judgment. He should avoid all activity that indicates there is the conflict of interest in the organization. He shall also not accept any form of favor from the client that may compromise his independence. Finally, it is the obligation of the auditor to disclose all the material facts that are known to him failure to disclose this fact may distort the presentation and reporting of the activity under review.
References
BIBLIOGRAPHY \l 1033 Fiolleau, K., Hoang, K., Jamal, K., and S Sunder. "How do regulatory reforms to enhance auditor independence work in practice?" Contemporary Accounting Research, 30(3), 2013: pp.864-890.
Pickett, K.S. The internal auditing handbook. John Wiley & Sons, 2010.
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