Discuss the importance of
accounting independence in
AIS. Give where the concept
is important. {20}
Accounting Independence (Audit
This is where by an accountant is not
biased. This means being neutral in the
preparation of financial statements.
It is a condition of accountant having no
bias and being neutral regarding the client or
another party in performing the audit
Accounting Independence (Audit
independence) cont..
Some independence guidelines for an
accountant engaged in the attest function
No family relationship with the client’s
No financial interest in the company;
No contingent fee based on the type of
audit option rendered
Information reliability requires
accounting independence.
Accounting activities must be separate
and independent of the functional areas
maintaining resources.
Accounting supports these functions
with information but does not actively
Decisions makers in these
functions require that such vital
information be supplied by an
independent source to ensure its
An unqualified report by independent
external auditors on the account should
give credibility and enhance the appeal
of the company to investors.
• This unqualified report should
represent the views of independent
experts who are not motivated by
personal interests to give a favorable
Threats to professional standards
 A lack of independence may lead to
a failure to fulfill professional
requirements to obtain enough
Failure to do this undermines the
credibility of the accountancy
profession and standards it enforces
Where the concept is important?
Accounting independence is
important for the purpose of
reliability as accountants
perform the following roles
with regard to the information
Where the concept is important?
Accountants as users
must decide what information
must be collected, how it must
be processed, and how it must
be reported.
 must work with computer professionals
in designing the conceptual system
while the computer professionals handle
the physical system.
Keep in mind that the AIS are the
custodian of the accountant’s data and the
processor of his or her information. The
AIS cannot be ignored.
Accountants as auditors
must form opinions of the fairness of a
company’s financial statements. In
recent years the profession has
broadened this attest function.
Assurance services include traditional
auditing but are also concerned with
the quality of information used by
decision makers..
Formation of that opinion is dependent
on the auditor’s ability to evaluate the
accounting system and have confidence
that its output is reliable.
IT auditing is performed as part of the
financial audit to determine the integrity of
the organization’s information system.
Internal auditors are employees of the