Auditor independence refers to the ability of the external auditor to act with integrity and impartiality during his/her auditing functions. According to the Indonesian Accounting Association (2010), auditor independence is an expected auditor behaviour that directs that an auditor does not have personal interest in doing his / her jobs, because it is contrary to integrity. Institute of Chartered Accountants of Nigeria (ICAN) (2013) also described auditor independence as comprising: (a) Independence of mind, that is, the state of mind that permits the provision of an opinion without being affected by influences that compromise professional judgment, allowing an individual to act with integrity and exercise objectivity and professional scepticism; and (b) Independence in appearance, that is, the avoidance of facts and circumstances that are so significant that a reasonable and informed third party, having knowledge of all relevant information, including any safeguards applied, would reasonably conclude a firm’s or a member of the assurance team’s integrity, objectivity or professional scepticism had been compromised.
With reference to Sarbanes Oxley Act (2002), independence is both a description of the relationship between auditor and client and the mindset with which the auditor must approach his or her work. The most general of the independence requirements in the auditing standards as provided in Paragraph 02 of AU section 150, Generally Accepted Auditing Standards states that “in all matters relating to the assignment, an independence in mental attitude is to be maintained by the auditor or auditors.” One measure of this mindset as spelt out in Paragraph 07 of AU section 230, Due Professional Care in the Performance of Work is the auditor’s ability to exercise “professional scepticism,” which is described as “an attitude that includes a questioning mind and a critical assessment of audit evidence.”