Independence is widely considered to be one of the defining characteristics of the public accounting profession and an important aspect of the CPA's role society (Loeb, 1978:136). As testament to its importance, is considered the ethical codes of all associations of professional auditors and for decades has been the subject of both philosophical debate and empirical research. Research on the related aspects of in fact and in appearance has never been more important than now. In recent times, CPA firms have been the subject of litigation (Minow, 1984) and unwanted notoriety. The bankruptcy of Laventhol and Horwath (Pae, 1990a), the voluntary dissolution of Spicer & Oppenheim (Pae, 1990b), and auditors' association with failed Savings and Loans (McCoy, et al., 1990; Finegan, 1990) have all raised serious questions about the ethical behavior of CPAs. Increasingly, the issue of independence is being raised as a thorny question the evaluation of the auditor's work (Garcia, 1989; Brannigan, 1987; Fialka, 1984). Whether this trend is new, or is just now surfacing, is difficult to determine. What should be clear, however, is the need for research on the long-ignored concept of in fact, and other issues regarding the current audit environment and its effect on general. The purpose of this paper is to suggest that prior research on the concept of auditor has generally produced inconsistent or inconclusive results because of its general failure to consider the importance of three issues. First, with the exception of Plumlee's (1985) study of internal auditors, there has been a lack of an operational definition of in fact which would encourage empirical research. Second, there has been a general failure to address