The Importance of Independence

question 45

Essay

The importance of independence.
Why is "independence" referred to as the cornerstone of auditing?

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Definitions:

Carrying Amount

The book value of assets and liabilities as reported in the financial statements, factoring in depreciation, amortization, and impairment.

Voting Shares

Shares that give the shareholder the right to vote on matters of corporate policy and the selection of board members.

Investment Account

A financial account held at a bank or brokerage that is used to hold securities, stocks, bonds, and other investments.

Unamortized Acquisition Differential

The portion of the difference between the purchase price and the book value of an acquired entity that has not yet been amortized.