AUDIT INDEPENDENCE: THREATS AND SAVING ACTION FOR THEIR DELAY

Abstract

Introduction. Auditor independence is a fundamental and basic principle of the professional ethics of the auditor, which is based on the value of the audit and its difference from other forms of control. That is why the auditor, when performing the audit task, should strive to adhere to all principles of professional ethics and to promote the observance of such principles by his colleagues in order to increase confidence in the results of the audit and increase the prestige of the audit profession. Method. The theoretical, methodological and informational basis of the research are the scientific works of leading domestic scientists on the theory and methodology of auditing; legislative and regulatory documents governing independent auditing; information resources that summarize the state of audit activity in Ukraine, available on the web site of the Audit Chamber of Ukraine. The research methodology is based on theoretical developments and scientific tools, which included: statistical method (in the study of the state and trends of the market of audit services in Ukraine), critical analysis and systematic approach (in the study of potential threats affecting the independence of the auditor and the system of precautionary measures, used by the auditor to reduce audit risk). Results. Due to the fact that an independent audit involves a tripartite relationship between the auditor, the client and the users of the financial statements, the auditor's activities are always exposed to threats related to breach of the principle of independence. It has been investigated that the essence of the principle of independence implies that the auditor's independence of opinion and independence of behaviour when providing audit services. Threats that affect the auditor's independence, classified as threats to self-interest, self-assessment, protection, personal and family relationships and pressure, are discussed. The set of precautionary measures that an auditor is required to investigate in order to minimize the impact of, or eliminate, the threats to the auditor's independence is examined. Based on the conducted research, we propose our own definition of the notion of safeguards in the audit - a system of requirements, rules and appropriate measures aimed at eliminating or reducing the threat of independence of the auditor to an acceptable level, the implementation and use of which will enable the auditor to achieve the audit objective, which is to express an independent the auditor's views on the reliability of the entity's financial statements, while minimizing audit risk. Discussions. The prospect of further intelligence is to investigate the impact of the precautionary measures on auditor independence in the context of reforming the domestic audit and bringing it closer to EU requirements.