Effectiveness of new safeguards and prohibitions to protect audit independence: an empirical research with auditors

Begoña García-Hernández ^[1] ; Antonio Duréndez ^[1] ; Alfonso A. Rojo-Ramírez ^[2]
1. [1] Universidad Politécnica de Cartagena
  
  Universidad Politécnica de Cartagena
  
  Cartagena, España
2. [2] Universidad de Almería
  
  Universidad de Almería
  
  Almería, España
Localización: Revista española de financiación y contabilidad, ISSN 0210-2412, Vol. 52, Nº 3, 2023, págs. 317-347
Idioma: inglés
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Resumen
- The EU has faced the moral hazard problem of auditors by protecting their independence in two ways, with the formulation of a general principle of independence, and with the implementation of a preventive and sanctioning framework of safeguards and incompatibilities. The latest EU Directive, which reformed the auditing profession, adopted and extended such measures. This research fills a gap in the literature by showing the perception auditors have of the benefits of this new regulatory framework to promote auditor independence. With this purpose, we developed a qualitative study using a questionnaire addressed to a sample of 192 auditors. Following structural equation modelling methodology (SEM), we obtained results showing that the new and more restrictive European regulation of personal and service incompatibilities has a positive effect and improves the perceived independence of auditors.