| Abstract: | This study reports the results of an investigation into the effects of the provision of non-audit services (NAS) on perceptions of auditor independence held within the Irish commercial environment, an environment not previously subject to a study of this nature. The methodology used in the study combined the use of a mail questionnaire and semi-structured interviews to allow both breadth of coverage and the opportunity to probe deeper into the nature of the perceptions held. The principal findings of the study were that perceptions of auditor independence were significantly diminished when NAS were provided to clients by personnel involved in the audit rather than by either a separate department within the audit firm or to non-audit clients only. The study highlighted that users of financial statements were willing to accept some reduction in auditor independence consequent upon the provision of NAS if this resulted in firms obtaining better or more cost-effective advice or if it resulted in a higher standard of audit. Analysis of the interviews provided further insights into the manner in which users of financial statements formed these perceptions and also suggested that, in the opinion of the interviewees, the small size and closeness of the Irish audit market acted to enhance rather than diminish audit independence. |
