My company contracts with an Independent Auditor that has served us for more than a decade. During this period, we have always had an unqualified audit opinion with no serious or significant notations from the auditor. It is important to note that current industry rules actually allow independent auditors to serve the same organization for years as long as certain lead partners on the engagement are rotated every so often. During this period, I have always questioned myself if the auditors are too invested in the organization. The auditor is a business and so has the interest of maintaining a profitable business relationship. There have certainly been red flags which were not necessarily raised by the auditor. Is it possible the auditor knew about some of these issues but chose not to raise them because of materiality? fear of running down a huge organization? fear of losing out a profitable business that could last for years? Or, was the auditor just not competent enough to spot some of these issues?

In this discussion, consider some of the responsibilities, risks and ethical issues as discussed in CH 7 that the independent auditor would need to consider as they work with a client. Discuss how any or some of these responsibilities, risks and ethical issues can affect the reasonable public user's judgement about the auditor's client.