Modeling the Role of Auditor Independence Within an Interactive Model of Audit Quality

• In Event: Break and Research & Education Poster Forum

Abstract

The purpose of this paper is to examine the concept of independence and its influence on auditor objectivity, integrity and, finally, audit quality to help guide the discussion, research and regulation of auditor independence. I propose an alternative interpretation of the relationship between auditor independence and audit quality. I present two frameworks, one to model the relationship of auditor independence to the auditor traits of objectivity and integrity and a second to suggest how audit quality is indirectly impacted by auditor independence, but directly influenced by objectivity, integrity and auditor competency. I suggest that perceived and factual auditor independence are both situational and relational variables, but differ in that perceived independence is an exogenous (external) variable whereas factual independence is an endogenous (internal) variable that cannot be observed. Further, I rely on virtue ethics to discuss the concept of independence and its relationship to audit quality.

Author

• Pamela Barton Roush, University of Central Florida