Question

Currently, audits are performed by public accounting firms for a fee that includes a profit component. Some members of the business community believe that the profit motive within audit fees or other allowable non-audit services provided by the audit firm compromises a public accounting firms ability to be truly independent of its clients. They propose that the audit function should be a governmental activity instead.

Do you agree with the idea that the public accounting firms could be influenced significantly enough by profit motives to compromise independence? If yes, what other options (other than governmental involvement) might remedy such bias? If not, what is your argument to support keeping the audits with the public accounting firms?

Answer 1

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