Non-Audit Services and Auditor Independence: Some Evidence from Malaysia

Abstract

Regulators and stakeholders in worldwide capital markets have placed a great concern on the potential threat of joint provision of audit and non-audit services to audit client on perceived auditor independence. This study reports the research findings of the effects of the joint provision of audit and non-audit services (NAS) on perceived auditor independence from the perspective of Malaysian auditors, loan officers and senior managers of public listed companies. The main findings of the study were that auditor independence would significantly threaten when audit and NAS were jointly provided by audit engagement team, however, this perceptions were changed when exist proper segregation of duties or 'Chinese Wall' in audit firms either by way of staff from separate department or entities.