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This paper examines how nonaudit services influence public perceptions of auditor independence. Recent expansion of these services by public accounting firms has caused some to question whether auditors who provide nonaudit services to audit clients can remain independent of their clients. However, others view nonaudit services as enhancing the auditor's uniqueness to the client, thus strengthening the auditor's independence. Given the importance of auditor independence, a survey was conducted to assess the specific influence of six particular nonaudit services on the ratings of auditor independence from members of the general public, professionals from non-Big 5 CPA firms and professionals from Big 5 CPA firms. Results suggest that an expectations gap may exist between the general public and the accounting profession with respect to how they view the impact of nonaudit services on auditor indpendence. Implications of the survey as well as directions that future research may take are discussed.
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