Real Independence and Perceived Independence
There are two important aspects to independence which must be distinguished from each other: independence in fact (real independence) and independence in appearance (perceived independence). Together, both forms are essential to achieve the goals of independence. Real independence refers to the actual independence of the auditor, also known as independence of mind. More specifically, real independence concerns the state of mind an auditor is in, and how the auditor acts in/deals with a specific situation. An auditor who is independent 'in fact' has the ability to make independent decisions even if there is a perceived lack of independence present, or if the auditor is placed in a compromising position by company directors. Many difficulties lie in determining whether an auditor is truly independent, since it is impossible to observe and measure a person’s mental attitude and personal integrity. Similarly, an auditor’s objectivity must be beyond question, but how can this be guaranteed and measured? This is why perceived independence is of such importance.
It is essential that the auditor not only acts independently, but appears independent too. If an auditor is in fact independent, but one or more factors suggest otherwise, this could potentially lead to the public concluding that the audit report does not represent a true and fair view. Independence in appearances also reduces the opportunity for an auditor to act otherwise than independently, which subsequently adds credibility to the audit report.d
Read more about this topic: Auditor Independence
Famous quotes containing the words real, independence and/or perceived:
“The words themselves are clean, so are the things to which they apply. But the mind drags in a filthy association, calls up some repulsive emotion. Well, then, cleanse the mind, that is the real job. It is the mind which is the Augean stables, not language.”
—D.H. (David Herbert)
“Our treatment of both older people and children reflects the value we place on independence and autonomy. We do our best to make our children independent from birth. We leave them all alone in rooms with the lights out and tell them, “Go to sleep by yourselves.” And the old people we respect most are the ones who will fight for their independence, who would sooner starve to death than ask for help.”
—Margaret Mead (1901–1978)
“to fasten into order enlarging grasps of disorder, widening
scope, but enjoying the freedom that
Scope eludes my grasp, that there is no finality of vision,
that I have perceived nothing completely,
that tomorrow a new walk is a new walk.”
—Archie Randolph Ammons (b. 1926)