Policies To Promote Auditor Independence: More Evidence On The Perception Gap

Abstract

The extensive body of literature and research concerning auditor independence, the so-called cornerstone of the profession, has centered mainly on alleged threats to perceived independence or threats to actual independence.  The objective of this study was to investigate accountants’ and financial statement users’ reactions to policies designed to enhance auditor independence.  Multidimensional scaling techniques were used to measure the similarity or dissimilarity of the views of four separate groups:  Big Eight auditors; non-Big Eight CPAs, bank loan officers, and certified financial analysis.  Results showed that the four groups differed significantly in the extent of their support of fourteen policies discussed in the Cohen Communication Report as means to enhance auditor independence.  The Cohen Commission’s position on these policies was found to appear to be more aligned with financial statement users.