Question

please explain in detail whether or not an auditor can ever be truly “independent.”

Answer 1

This issue of whether an auditor can ever be truly “independent" rises from the integrity of auditors. Independence in appearance is letting third party have knowledge of all relevant information, including safeguards applied. For example, in Interpretation 101-3, CPA may assist an audit client in implementing the system or make some modifications for the client, but the changes cannot be more than insignificant. Such extent is hard to measure, so, the auditor may take the risk to be independent in appearance but not independent in fact. Other causes such as the auditor providing other services for contingent fees, direct financial interest with the client or participating control or manage the client company are also the examples of breaking the independence in appearance rule.