Question :
Independence is taken the cornerstone of the accounting profession. In relation to the audit the auditor could be independent in both fact and in appearance. Usually accepted auditing standards (GAAS) prohibits an auditor from issuing a report if they are not independent. This will lead to an interesting situation if a member of the audit team loses independence shortly before the report is issued, even if it is through no fault of her/ his own, (i.e,. a family member becomes employed by a client). Do you think that the rules about independence are too strict? Should they be more fair? Should the audit firm be punished if an auditor related to the audit is not independent?
The Sarbanes Oxley Act prohibits the similar CPA firm from give both consulting and audit services to a client. Some argued, and continue to argue, that auditors will never be independent as long as they receive a fee from the audit client. Do you agree or disagree? Why? How could you suggest this issue be resolved?