Independence

In your understandings, what are professional competence and due

care/diligence? What are differences between independence in facts and
independence in appearance?

❖ Independence in fact: Is when the auditor has an independent state of mind,

plans and executes an audit and the resulting audit report is unbiased and not
affected by influences that compromise your professional judgment.
Example: You go to audit for a company, no one can not affect your
professional judgment.

❖ Independence in appearance: Is being perceived as an independent auditor

by the third party, it concluded that your integrity, objectivity, or professional
skepticism has no problem.
Example: If you audit a company, there is no one in that company you have a
close relationship with, you would be perceived to be independent in appearance.

❖ Example for independence in fact and independence in appearance:

You have parents who are shareholders of a company.You go to audit that company
with an independent state of mind, your resulting audit report is completely unbiased.
The fact that your parents can not affect the result, so you are independent in fact. But
you don’t have independence in appearance because no one would actually see you as
independent (independence in appearance), do not believe that you will be unbiased.