(513) 933-0225
services@myteamaccounting.com

LET'S MEET
  • Home
  • Services
    • Accounting & Bookkeeping
    • Cash Flow Forecasting
    • Advisory/Outsourced CFO
    • Consulting for QuickBooks®
    • Training for QuickBooks®
    • Payroll
  • Accounting Products
    • QuickBooks® Online
    • QuickBooks® Online Advanced
    • QuickBooks® Desktop
    • QuickBooks® Payments
    • QuickBooks® Point of Sale
    • QuickBooks® Enterprise Solutions
  • Industries
    • Services
    • Real Estate
    • Medical and Health Care
    • Construction
    • Retail
    • eCommerce
  • Resources
    • Resources
    • Partners
    • Mobile Accounting
  • Blog
  • Testimonials
  • About
    • Our Team
    • Our Values
    • Why Us?
    • Send Us Your Referrals
    • FAQ
  • Contact
  • Home
  • Services
    • Accounting & Bookkeeping
    • Cash Flow Forecasting
    • Advisory/Outsourced CFO
    • Consulting for QuickBooks®
    • Training for QuickBooks®
    • Payroll
  • Accounting Products
    • QuickBooks® Online
    • QuickBooks® Online Advanced
    • QuickBooks® Desktop
    • QuickBooks® Payments
    • QuickBooks® Point of Sale
    • QuickBooks® Enterprise Solutions
  • Industries
    • Services
    • Real Estate
    • Medical and Health Care
    • Construction
    • Retail
    • eCommerce
  • Resources
    • Resources
    • Partners
    • Mobile Accounting
  • Blog
  • Testimonials
  • About
    • Our Team
    • Our Values
    • Why Us?
    • Send Us Your Referrals
    • FAQ
  • Contact
February 11, 2021

The Concept of Independence in Accounting

Ellen Allen Uncategorized

Independence is a key concept in accounting, especially in the assurance or auditing area of accounting. Assurance services are services where a licensed CPA reviews an organization’s financial statements and accounting records and provides an opinion about them. This opinion takes the form of a report that can be shared with third parties such as banks and shareholders. Auditing services are one of many forms of assurance services.

Only a licensed CPA can provide assurance services; this is regulated by the states. A CPA who provides certain assurance services must be independent from the business that it is writing an opinion for. Essentially, independence means that the auditor must be able to do their work objectively and with integrity. And it goes farther. The auditor must not be perceived as having any kind of bias or connection with the business it is auditing. There must be no perception of any impropriety.

To this end, the auditor must not have a relationship with the company’s executives. A CPA cannot, for example, audit her brother’s company.  A CPA cannot be an investor in the company and also be the auditor because of the financial relationship. The audit opinion must not be influenced in any way by a relationship between the auditor and anyone in the company. The CPA must be able to provide an honest, professional, and unbiased opinion when auditing financial statements.

Being independent also means the CPA must have a healthy dose of skepticism.  A common phrase in the accounting profession is “Trust, but verify.”

Numerous rules abound to protect auditor independence. For example, an auditor cannot be paid on a contingent or commission basis. All practicing CPAs must complete ethics courses every few years, and these almost always include independence scenarios and case studies.

If you have any questions about independence, assurance, or auditing, please feel free to reach out any time.

Ten Places to Look to Find More Profits

Related Posts

Uncategorized

7 Tips to Become a Successful Accountant

Uncategorized

Five Year Record Evaluation

Uncategorized

How to Improving Teamwork

Recent Posts

  • The Concept of Independence in Accounting
    February 11, 2021
  • Ten Places to Look to Find More Profits
    January 27, 2021
  • Should Your Business Become Cash-Free?
    January 14, 2021
  • Home
  • Services
  • Accounting Products
  • Industries
  • Resources
  • Blog
  • Testimonials
  • About
  • Contact

Sitemap

  • Home
  • Services
  • Accounting Products
  • Industries
  • Resources
  • Blog
  • Testimonials
  • About
  • Contact

Citrix ShareFile

Affiliations

Lebanon Area Chamber of Commerce

The Ohio Society of CPAs Lebanon OH Mason OH

Contact Us

My Team Accounting

(513) 933-0225
services@myteamaccounting.com

726 E. Main St. Suite F-217
Lebanon, OH 45036-1900

Serving clients in Lebanon, OH, Mason, OH and throughout the United States.

Copyright My Team Accounting 2020 | Site Design by Accelerator Websites
Intuit, QuickBooks®, and QuickBooks® ProAdvisor are registered trademarks of Intuit Inc. Used with permission under the QuickBooks® ProAdvisor Agreement.