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Auditor Independence and NAS: A Comparative Analysis of Selected Current Regulatory Frameworks

Working Paper No. 36

40 Pages Posted: 26 Apr 2012  

Ainul Islam

Victoria University of Welington - School of Accounting and Commercial Law

A.K.M. Waresul Karim

Saint Mary's College of California - Graduate Business Programs

Tony van Zijl

Victoria University of Wellington - Faculty of Commerce and Administration

Date Written: 2005

Abstract

There is a widespread public perception that the provision of NAS undermines auditor independence. In order to protect auditor independence, the regulatory frameworks of many countries include regulations and guidelines which auditors are required to observe. This paper provides a comparative analysis of selected regulatory frameworks. Regulatory frameworks, with respect to independence, make distinctions between independence of mind and in appearance. It is clear from the analysis of the frameworks that the provision of NAS can threaten both inpendence of mind and in appearance. There are some NAS for which no safeguard seem to be adequate and which are therefore subject to prohibition. On the other hand, for some nonaudit services the threats are not so clearcut, and auditors are then required to apply professional judgment so that the seriousness of the threats is balanced against the effectiveness of specified safeguards.

Suggested Citation

Islam, Ainul and Karim, A.K.M. Waresul and van Zijl, Tony, Auditor Independence and NAS: A Comparative Analysis of Selected Current Regulatory Frameworks (2005). Working Paper No. 36. Available at SSRN: https://ssrn.com/abstract=2046380 or http://dx.doi.org/10.2139/ssrn.2046380

Ainul Islam (Contact Author)

Victoria University of Welington - School of Accounting and Commercial Law ( email )

PO Box 600
Wellington, 6140
New Zealand
+6444636107 (Phone)
+6444635076 (Fax)

A.K.M. Waresul Karim

Saint Mary's College of California - Graduate Business Programs ( email )

United States

Tony Van Zijl

Victoria University of Wellington - Faculty of Commerce and Administration ( email )

RH 606, Pipitea Campus, 6th Floor, Rutherford Hous
23 Lambton Quay
Wellington
Australia

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