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:
“Patience, to hear frivolous, impertinent, and unreasonable applications: with address enough to refuse, without offending; or, by your manner of granting, to double the obligation: dexterity enough to conceal a truth, without telling a lie: sagacity enough to read other people’s countenances: and serenity enough not to let them discover anything by yours; a seeming frankness, with a real reserve. These are the rudiments of a politician; the world must be your grammar.”
—Philip Dormer Stanhope, 4th Earl Chesterfield (1694–1773)
“Hail, Columbia! happy land!
Hail, ye heroes! heaven-born band!
Who fought and bled in Freedom’s cause,
Who fought and bled in Freedom’s cause,
And when the storm of war was gone,
Enjoyed the peace your valor won.
Let independence be our boast,
Ever mindful what it cost;”
—Joseph Hopkinson (1770–1842)
“In contrast to the flux and muddle of life, art is clarity and enduring presence. In the stream of life, few things are perceived clearly because few things stay put. Every mood or emotion is mixed or diluted by contrary and extraneous elements. The clarity of art—the precise evocation of mood in the novel, or of summer twilight in a painting—is like waking to a bright landscape after a long fitful slumber, or the fragrance of chicken soup after a week of head cold.”
—Yi-Fu Tuan (b. 1930)