Non–Audit Services and Rotation Issues Affecting Auditor Independence: Emerging Perceptions from Audit Practice

Vida Botes, University of Waikato
Mary Low, University of Waikato
Sarah Taylor-Dayus, University of Waikato

Abstract: Corporate scandals and the global financial crisis have cast doubt over auditors’ integrity and credibility. At the heart of this doubt lies increasing concerns over the issue of auditor independence. New Zealand like the rest of the developed world, in an attempt to restore faith in its financial markets, has embarked on a number of reforms. Audit independence issues are increasingly fueled by concerns raised over the significant amounts of revenue being collected by external auditors for non-audit services. Questioning audit independence is not new and has been the subject of extensive research. The research found that respondents were aware of the importance of independence to the profession and largely agreed with the changes that were being made to the Code of Ethics. Given the importance placed by the share market and other stakeholders, on the independence of the auditor, this study will be of significance to those who have an interest in the work performed by auditors.