Advertisement

Springer Nature is making SARS-CoV-2 and COVID-19 research free. View research | View latest news | Sign up for updates

Enhancing perceptions of auditor independence

Abstract

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.

This is a preview of subscription content, log in to check access.

References

  1. 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.

  2. Lavin, D.: 1976, ‘Perceptions of Independence of the Auditor’, The Accounting Review 51, 41–50.

  3. Pearson, M. A.: 1980, ‘A Profile of the Big Eight Independence Position’, Baylor Business Studies 11, 7–27.

  4. Pearson, M. A. and Ryans, J. K., Jr.: 1982, ‘Perceptions of an Auditor-Management Conflict’, Review of Business and Economic Research 17, 1–10.

  5. Shockley, R. A.: 1981, ‘Perceptions of Auditors' Independence: An Empirical Analysis’, The Accounting Review 56, 785–800.

Download references

Additional information

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.

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Pearson, M.A. Enhancing perceptions of auditor independence. J Bus Ethics 4, 53–56 (1985). https://doi.org/10.1007/BF00382673

Download citation

Keywords

  • Economic Growth
  • Educational Program
  • Management Control
  • Financial Statement User
  • Audit Committee