Financial statement users must believe that external auditors are free from management control, or users will doubt the verity of auditors' representations. Although U.S.-based auditing firms claim they are independent of their corporate clients, research has demonstrated that many individuals and groups perceive the situation otherwise. A proposal for enhancing perceptions of auditor independence is offered in this article. The proposal calls for an auditor-administered educational program, complemented by corporate audit committee involvement to lend credibility to auditors' claims.
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American Institute of Certified Public Accountants: 1983, AICPA Professional Standards Volume B: Accounting and Review Services, Ethics, Bylaws, International Accounting, International Auditing, Management Advisory Services, Quality Control, Tax Practice, Commerce Clearing House for the AICPA, Chicago.
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Michael A. Pearson is Associate Professor of Accounting at Kent State University. He received B.S. and M.B.A. degrees from Northeastern University and earned a D.B.A. degree at Kent State. Dr. Pearson is a Certified Public Accountant (CPA) and also holds the Certificate in Management Accounting (CMA). He has written numerous articles for academic and professional journals, and he is currently Associate Editor of The Ohio CPA Journal.
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Pearson, M.A. Enhancing perceptions of auditor independence. J Bus Ethics 4, 53–56 (1985). https://doi.org/10.1007/BF00382673
- Economic Growth
- Educational Program
- Management Control
- Financial Statement User
- Audit Committee