The Impact of Audit Fees on Auditor Independence

Auditor Independence and Audit Fees in Practice

By [Student’s Name]

Course Code and Name

Professor’s Name

University

City and State

Question One

The Fee-payment system can cause a conflict of interest that may lead to a lack of objectivity of audit. For instance, when the fee of the auditor is from the entity being audited. This is because the auditor will feel entitled to keep the people who pay their fees happy. Notably, there is an ethical problem that exists in auditors when there is a conflict of interest between the client and the client management; therefore, there is a need to keep all auditors independent.

CPAs can be independent even when their fee is dependent on the client. However, this can only happen if the auditor is willing. Precisely, the CPAs can decide to hold a characteristic of a profession and say no when companies try to break…