Actual independence considers only the aspects of accounts and is, therefore, simple in the feature. Its benefit is that it helps the auditor to provide a true and fair view of the affairs. Hence, the audited statement is concrete and authentic. It gets distorted when it is management with various other fees or any other personal payment. On the contrary, perceived independence stress on the link between the client, and an auditor. Moreover, it gets an insight that whether the auditor has an independent status or not (Holland & Lane, 2012). Therefore, it is a strong tool to assess that whether the report is authentic or not. For the audit to be successful it is essential that both the audit process need to be into practice.
The financial details of Club Casino were used by its auditor Bob to perform the function of the audit. In this case, it needs to be noted that the important information is used by the auditor without any approval or permission and hence, is n contravention of the regulations laid down by CCI (Tepalagul & Linn, 2015). The auditor must not share any details of the client because if the client provides in writing the non-disclosure of specific information then the auditor will land in difficulty.
As per the case, Wendy acted as an engagement partner in Ace Ltd years back and performed secretarial duties for 6 months. However, as per the provision of the companies act, an auditor who is appointed for the audit work cannot perform secretarial duties as this goes against the law (Mock et. al, 2013).
The mentioned case relates to the independence of the auditor and stresses on the non-audit services provided by the auditor. This is because a sense of personal touch and familiarity can develop thereby leading to disruption in the process of decision-making (Church et. al, 2008). Therefore, it is imperative that any material link exists between the auditor and the external parties, the result is impacted in a negative manner.
In the present case, the auditor’s professional morality is highlighted. The problem of self –interest can be witnessed as Chan and Associates obtained Classic Reproductions Pvt. Ltd furniture. A stake of 25% was provided by the auditor in a company that is unassociated in nature as thanksgiving. The furniture appeared to be half of the balance that is left over. Hence, the fees of the audit should not exceed the fee in actual as financial interest can affect the opinion of the audit thereby heading towards bigger problems and the decisions get disrupted (Coram et. al, 2011). It is thereby important that the auditor should be free from all sort of financial interest otherwise, it affects the quality of the audit and leads to an immense problem for the organization. Hence, in all scenarios, there must be a strong line of difference that separates the auditor and the parties who are interested.
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