An Introduction to Auditor Independence Rules

Accountants performing audits, reviews, or compilations of a client’s financial statements (also referred to as attest engagements) are required to be independent of their client. Over time, the definition of independence has grown in nuance and complexity, as independence rules of varying degrees of specificity have been promulgated by a variety of sources. The application of these rules, however, yields a binary result—the auditor is either independent or not—and the ramifications of an independence violation can be significant.