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 independence 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.
