Safeguarding Auditor Independence: Concerns Surrounding Procurement and Purchases from Audit Clients
- annual renewal of practising certificates
- annual renewal of CPA Firm, Corporate Practice and PIE Auditor registrations; and
- application for registration as a Registered PIE Auditor.
The article aims to highlight the AFRC’s concerns regarding potential threats to auditor independence that may arise from procurement and purchases involving audit clients. Audit firms should be vigilant about their relationships with audit clients and implement robust procedures for identifying and mitigating potential independence threats. The article also points out that audit committees should take a more proactive role in safeguarding their auditors’ independence.
As an overarching principle, audit firms and their personnel must remain alert to any transactions with their audit clients and the potential impact on their independence. In addition, the AFRC highlights four key independence principles for reminding audit firms and professional accountants to uphold their independence and provides advice for audit committees on overseeing their auditors’ independence.
