Analysis of the Benchmark for External Auditors Assignment

Analysis of the Benchmark for External Auditors - Assignment Example Without exception, all external auditors should not allow their independence to be affected by his or her own interests. For, Auditing Standards mandate that external auditors must accept an audit engagement if they feel that their self-interests affect their independence. Independence means not only independence in fact but also go hand in hand with independence through appearance. The Auditing Standards on independence rule states that the auditor must not have any material self-interest in the clients. An auditor has self-interest if the auditor, the auditor's spouse, and children own a share of stock or two in the audit client. The Companies Act of 1948 is the legal framework for external auditors to follow in terms of independence (Power 1997, 17). Clearly, many auditors will not allow their independence to be affected by self -interests. Likewise, it is mandatory that all external auditors will not allow their independence to be affected by self - review. The auditor is required under all audit situations to consider if self -review will affect his independence. The auditor must not continue with the auditor sign as an external auditor if he or she believes that self-review will infringe on the auditor's independence. Clearly, it is mandatory that all external auditors will not allow their independence to be affected by self - review. Further, all external auditors should not allow their independence to be affected by advocacy. The auditor's membership in a group will have a strong impression that the auditor is not being independent in terms of auditing a client. The Code of Ethics for external auditors commands that the external auditor must not have his membership in an organization affect the independence of the auditors. The auditors must be independent in fact and in appearance. For any sign that tinges on decreasing the independence of the external auditor would signal that the external auditor should immediately withdraw from the engagement. Definitely, all external auditors should not allow their independence to be affected by advocacy. Furthermore, all external auditors must not permit their independence to be affected by familiarity. It is a fact that many external auditors can easily finish their audit assignments for many of their former audit clients. The auditors will just focus on accounts that seem doubtful or where the internal control is weak because they had already issued an unqualified opinion on the prior financial statement.  Ã‚