The impact of non-audit services on auditor independence and audit quality: risks, regulations, and ethical considerations

Ramlan, Nur Syafiqah Balqis and Hassan, Rabaatul Azira (2025) The impact of non-audit services on auditor independence and audit quality: risks, regulations, and ethical considerations. Accounting Insights Compilation books: A Compilation of Students Practical Papers, 1: 13. pp. 67-72. ISSN 9786299634010

Abstract

The granting of non-audit services (NAS) has been regarded as a controversial area for audit firms in respect to how it might influence their independence and the quality of auditing. Some claim that NAS enables positive spillovers and therefore enhances the quality of audits, whereas others contend that it creates economic dependencies that are detrimental to the objectivity of the auditor. This study analyzes the contradictory effect of NAS with an emphasis on financial dependences and threats to self-interest and self-review as professional scepticism and the justification of bias become easier and more prevalent than the audit outcomes question independence. There is a divide among the jurisdictions on how to respond to NAS, with some being more aggressive in their prohibition while others apply a softer touch allowing a controlled amount of NAS under tighter supervision. There are gaps in existing empirical literature, suggesting that the overwhelming NAS approach to audit quality is too simplistic without considering governance systems, and laws. This study highlights the need for more definitive answers to justify the power of NAS with stronger policy guidance and negative NAS disclosures and NAS in general. It calls for a reconsideration of existing frameworks to ensure that independence of the auditors is guaranteed while guaranteeing that the quality of audit work does not diminish.

Metadata

Item Type: Article
Creators:
Creators
Email / ID Num.
Ramlan, Nur Syafiqah Balqis
UNSPECIFIED
Hassan, Rabaatul Azira
rabaatul@uitm.edu.my
Subjects: H Social Sciences > HF Commerce > Business ethics
H Social Sciences > HF Commerce > Accounting. Bookkeeping > Auditing. Auditors
Divisions: Universiti Teknologi MARA, Kelantan > Machang Campus > Faculty of Accountancy
Journal or Publication Title: Accounting Insights Compilation books: A Compilation of Students Practical Papers
ISSN: 9786299634010
Volume: 1
Page Range: pp. 67-72
Keywords: Auditing, Conflict of interests, Corporate governance
Date: 25 September 2025
URI: https://ir.uitm.edu.my/id/eprint/125151
Edit Item
Edit Item

Download

[thumbnail of 125151.pdf] Text
125151.pdf

Download (280kB)

ID Number

125151

Indexing

Statistic

Statistic details