COMMENTARY––A Public Interest View of Auditor Independence: Moving Toward Auditor Reliability When Considering and Promoting Audit Quality

Abstract

ABSTRACT A longstanding view inside and outside the auditing profession is that the public accounting profession rests on the foundation of independence (Previts and Merino 1998), with regulatory bodies requiring auditors to be independent both in appearance and in fact. For many decades, regulators and stakeholders alike have held the view that auditor independence is the auditor's endgame. We review recent research on the Reliability Framework, which recasts auditor independence with other professional constructs, including integrity, competence, and objectivity, as co-antecedents of auditor reliability and audit quality. On that basis, this commentary advocates that a public interest view of auditor independence must account for the auditor's real reason for existence based on what stakeholders want and need: reliable audit services that facilitate financial reporting quality and protect the public interest. Recent initiatives by the Center for Audit Quality and its member firms, as well as the profession's regulators, reveal movement consistent with this holistic view. These developments indicate that the public interest view of auditor reliability is shifting toward a revised view of independence, along with other professional constructs that co-create audit quality and reliable financial reporting.