Question

What are your thoughts on auditing firms receiving payment for services rendered by the very firms...

What are your thoughts on auditing firms receiving payment for services rendered by the very firms they are providing financial disclosure opinions on? Do you think it still has any negative effects today as it has in recent past, like with the examples you discussed?

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Answer #1

Satutory Auditing firm cannot give any other professional services to their client company.This is prohiboted as this affects auditor's independence.

Internal Auditing firms can give other services as they are engaged by the client itself.

Examples:auditor give some other professional services to the cient company.Later he found some frauds in company affairs.Then the mangement asked to overlook it and give a clear report , otherwise it will not pay the fees for the other professional services.

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