How does auditor independence relate to the agency relationship between owners and managers discussed in Chapter 1?
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total answers (1)
total answers (1)
Accounting
- From an agency perspective, if the principal (owner) knows that the auditor is not independent, the owner will not trust the auditor's work.
- Thus, the agent will not hire the auditor because the auditor's report will not be effective in reducing information risk from the perspective of the owner.
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