auditor independence

Safeguard of studyor independence (i)Established An Audit Committee We support the given valuate as Sarbanes-Oxley Act of 2002, Section 204 requires take stockors reports to examine committee (www.sarbanes-oxley.com).First, much(prenominal) committee is independent non-executive directors provide auditors an independent point of name than executive directors of the company. Second, it enhancing the independence of auditors by provides a direct crinkle of communication between top management and the auditors. As such, it relieves the get on from detailed involvement in the review of result of audit activities. Third, the audit committee able to review with the external auditors their audit plan and evaluation of internal control concurrently promotes elegant reporting from the prospective of shareholders, creditors and employees (Auditing and Assurance Services in Malaysia, third Edition 2007). (ii)Rotation of Audit Partner Sarbanes-Oxley Act of 2002, Section 203 stated audit partner must rotate every 5 historic period (www.sarbanes-oxley.com). We do not support as regular gyration increase the risk of audit failures because significant cartridge clip inevitable developing the necessary knowledge of a customer to consider the audit approach is effectively (www.fao.org/docrep/meeting/008/J2128e.htm).

The auditor may reluctance to invest time and resources in learning the clients memorial tablet and activities when the auditors mandate is unforesightful and rotation date approaches could lose interest in the client. 10 It problematical significant cost for both client and auditor. The investment of time and resources in helping new auditor acquaint himself with the organizations system and procedures is time-consuming and costly as exchangeable for the auditor. (iii)Restrictions on Non-Audit Services Section 201under Sarbanes-Oxley Act 2002 stated it is unlawful for an auditing sozzled to provide both audit services and non-audit services simultaneously (www.sarbanes-oxley.com). We support the recommendation because... If you want to get a luxuriant essay, order it on our website: Orderessay

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