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:
“A man’s real and deep feelings are surely those which he acts upon when challenged, not those which, mellow-eyed and soft-voiced, he spouts in easy times.”
—Sarah Patton Boyle, U.S. civil rights activist and author. The Desegregated Heart, part 2, ch. 13 (1962)
“In a famous Middletown study of Muncie, Indiana, in 1924, mothers were asked to rank the qualities they most desire in their children. At the top of the list were conformity and strict obedience. More than fifty years later, when the Middletown survey was replicated, mothers placed autonomy and independence first. The healthiest parenting probably promotes a balance of these qualities in children.”
—Richard Louv (20th century)
“To be is to be perceived [Esse est percipi].”
—George Berkeley (1685–1753)