What is the Social Relationship between Independent Auditors and Stakeholders?: Fiduciary Relationship

Abstract

The purpose of this paper is to reexamine the social relationship between independent auditors and stakeholders, and to clarify a new perspective on the social relationship between them. We have not been sufficiently studied the social relationship between independent auditors and stakeholders in spite of its significance in the past. Previous audit studies have regarded the social relationship between independent auditors and stakeholders as a trivial issue. However, we need to discuss why such a significant relationship has not been adequately studied, and to reexamine the social relationship between independent auditors and stakeholders. Because trust in independent audit, independent auditors’ power (authority), their responsibilities, their ethical duties and others are determined in the social relationship of independent audit, especially the social relationship between independent auditors and stakeholders as primary beneficiary. Thus, studying the social relationship between independent auditors and stakeholders is crucial to audit studies and practices.In conclusion, this paper presents that the social relationship between independent auditors and stakeholders is a fiduciary relationship as a new perspective. This new perspective is necessary in order for us to deeply understand the fundamentals of today’s independent audit, to consider an appropriate response to audit deficiencies and audit failures, and to restore public trust.