Perceived Independence of Auditors in Least Developing Audit Market: A Literature Review and Study Framework

Abstract

Compromised quality of audit practice do have a devastating impact on the development and sustainability of an economy, as the professional accounting and auditing service is subject to adherence to professional standards and legal provisions; however literatures indicated that there exist situations in which the audit found to underserved its purpose as it was found that companies that reported an unqualified audit report demonstrated performance contradictory to the report and resulted the consecutive failure of the auditors in the recent past.( Anlop &Chandla, 2003). This has been repeatedly mentioned as the underpinning rational for examining the effectiveness of auditors’ independence from different perspectives.  Studies on auditors’ independence and its effect of actual audit quality and users expectation gap are useful to inform regulatory bodies and the accounting profession in devising ways to enhance auditors’ independence and the role in corporate governance.  The purpose of this exploratory study is to review existing empirical studies on auditors independence to developed a theoretical framework that facilitate further studies in least underdeveloped audit market. The study is conducted based up on review of literatures and identified the factors that possibly influenced perceived independence of auditor.

Keywords: Audit, Independence of Auditors, Perceived Independence, Factors, Study Framework