Auditors’ Independence in the Context of Corporate Governance

Author:Associate Prof. Camelia Liliana DOBROŢEANU, Ph. D., Professor Laurenţiu DOBROŢEANU, Ph. D., Assistant Adriana Sofia RĂILEANU, Ph. D. Student

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Keywords:independence, corporate governance, auditors, audit committee, governance code

Abstract:
The recent regulations issued by the Bucharest Stock Exchange (BSE) on corporate governance (CGC-2008) have introduced major changes of corporate governance policies of listed companies. The present paper develops a pertinent analysis of some sections of the code provisions and the relevant legislation with the objective to examine the implications of such regulations over the auditors’ independence. The research was conducted as part of a CNCSIS financed research project ID-1785/2009 – „Rolul guvernanţei corporative în securizarea încrederii investitorilor: performanţa autohtonă versus performanţele europene şi internaţionale”, project manager, Camelia Liliana Dobroţeanu.\r\nThe research methodology approached critical analysis of a comprehensive relevant literature, supplemented by inductive and deductive reasoning. To secure the objectivity of their judgment, the authors considered a twofold benchmark: the first relates to the similar studies within the international scientific flow of publications and the second one refers to the corporate governance principles applied in countries with relevant tradition, such as the United Kingdom. The research results indicate that the audit committee would be more effective in securing the internal auditors’ independence if it is assigned with a significant higher responsibility in terms of employment, dismissal and rewarding policies relevant to internal auditors. Additionally, the study conclusions envisage that, although the regulations apparently render a reasonable degree of independence to external auditors, the persistence of confusions linked to the external auditor’s engagement and the addressee of the audit report could be factors that might trigger suspicions about the auditors’ independence. By the nature of explored issues and the approaching manner, the present paper is confined to current trends in international scientific research and points out the first contribution within the national relevant literature.\r\n

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