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Auditor independence is defined as the ability of an auditor to remain unbiased in exercising their professional judgment when providing assurance that their client’s financial statements are free from material errors. Because many people rely on a company’s financial statements, the role of an auditor, and their independence, is important to ensure that those financial statements are reliable and free from material errors. If an auditors’ independence becomes impaired, the auditor is considered biased and no longer able to exercise their professional judgment objectively when providing auditing services, which is the result of an economic bond and close auditor-client relationship. This bond or relationship is formed when the same auditor provides non-audit services like bookkeeping, financial information system design implementation, and other services outside of auditing to their client. This paper examines whether or not auditor independence is impaired when non-audit services are provided by analyzing various peer reviewed research articles. Within the articles we examined factors that cause auditor impairment, the various proxies and measurements used to test impairment, and the results of those studies. The analysis shows that non-audit services do not impair an auditors’ independence, and if it did it would be in appearance and not in fact. |
