A Current Evaluation of Independence as a Foundational Element of the Auditing Profession in the United States

Abstract

SUMMARYThis paper summarizes '“Auditor Independence in the United States: Cornerstone of the Profession or Thorn in Our Side?”' (Church, Jenkins, and Stanley 2018). Their paper maintains that while the concept of independence is theoretically appealing, it is fraught with practical problems. Church et al. (2018) analyze the current oversight of auditor independence in the U.S. and the need for auditor independence from the perspective of various parties involved in the financial reporting process. In doing so, the paper discusses implications and challenges affecting one or more of these parties. Finally, Church et al. (2018) evaluate alternatives to the current regulatory approach of prohibiting various auditor client relationships to manage auditor independence. The paper concludes that increasing audit committees' responsibilities for monitoring auditor independence, along with additional disclosure about threats and safeguards to auditor independence, is worthy of further discussion and debate as a path toward addressing the auditor independence conundrum.