Independence in appearance: a research-based commentary on the EC Green Paper

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In the wake of the financial crisis, the EU Commission has published a Green Paper on the future role of the audit function in Europe. The Green Paper lists a number of proposals for tighter rules for audits and auditors in order to contribute to stabilizing the financial system. The present article presents research contributions to the question whether the auditor is to continue to provide both audit and non-audit services (NAS) to an audit client. Research results show that this double function for the same audit client is a problem for stakeholders' confidence in auditor independence. The green Paper proposes that a solution could be to prohibit NAS to audit clients. Research results indicate alternative possibilitiers: e.g. banning the most harmful non-audit services and / or limiting the relative share of fees from NAS
LanguageEnglish
JournalRevision og Regnskabsvaesen
VolumeSærnummer
Issue number5
Pages (from-to)42-51
Number of pages10
ISSN0034-6918
Publication statusPublished - 2011