Auditing and Attestation- Certified Public Accountant (CPA) Practice Exam -

Which aspect of auditor's responsibility must be maintained to ensure audit integrity?

1. Technical knowledge of the client's industry.

2. Independence from management influences.

3. Past audit knowledge of the entity’s performance.

4. A strict adherence to auditor standards.

The correct answer is: Independence from management influences.

To ensure audit integrity, independence from management influences is crucial. Auditors are tasked with providing an unbiased opinion on the financial statements of an entity. If an auditor lacks independence, whether through personal relationships, financial ties, or management pressures, it can lead to a conflict of interest. This could result in biased judgments that compromise the audit quality and objectivity. Independence allows auditors to remain impartial and uphold the ethical standards required in the auditing profession. It ensures that the auditor's judgment is not swayed by the entity being audited, allowing for a fair and thorough assessment of the financial statements. Maintaining independence protects the credibility of the audit process and fosters trust among stakeholders who rely on the financial reporting. While technical knowledge of the client's industry, past audit knowledge of the entity's performance, and adherence to auditor standards are all important elements of an effective audit, none are as critical to maintaining the integrity of the audit itself as the auditor's independence. Without being independent, even the most knowledgeable and technically competent auditor could compromise the trustworthiness of their findings and conclusions.