He currently chairs the Financial Ethics Committee of the International Association of Financial Executives Institutes.
I n search of additional fees, big accounting firms now offer "extended" audit services to corporate clients, including both external and internal audit functions. But there have been no new guidelines to keep auditors independent and truly impartial. However, that may soon change.
he structure of the public accounting profession continues to evolve. The process ofoversight ofits activities alsois changing.
T In the mid-nineties the traditional "Big Eight" firms were reduced to six and, if the Department of Justice approves, may become four in the near future. And there are rumors that the management consulting division of one large firm may "split" from the auditing and tax division and seek a future on its own.
Meanwhile, the trend in fees generated by the auditing and tax services has not matched the growth in fees from consulting and other managerial services. In the quest for additional fees, "extended" audit services have evolved. An example is the "extension" of the traditional audit engagement to include both the external audit and the internal audit functions.
As these new engagements continue to unfold, the appropriate guidance in terms of independence has not maintained pace. Advancements in technology have made distance and location of staff almost irrelevant in terms of immediate access to information and expertise. The latter can be located to satisfy the providers, and can be quickly applied to anywhere in the world.
Past guidance and standards regarding independence may simply no longer be applicable. This article will review the issues involving independence and its applicability to the ever-evolving public accounting profession.
CONCERNS FOR THE LOSS OF INDEPENDENCE
Concerns have developed that the competitive environment in which the auditing profession now practices may have a detrimental impact on independence.