Abstract

This paper discusses about auditor independence and audit expectation gap. An independent auditor is essential because of the separation of ownership from the management; the independent factor is the foundation of the public accounting profession and upon its maintenance depend the profession’s strength and its stature. Independence is fundamental to the reliability of auditors’ reports. The causes for reducing independence are economic dependence of the auditor on the client; audit market competition; the provision of non-audit services (NAS); the regulatory framework. Due to these causes auditors are not able to produce a fair report. Therefore “auditor independence is a key element of the audit expectation gap”. If auditors are independent it reduces the expectation gap.

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