A notion of auditor independence, envisaged as crucial to the credibility of the audit function, resides in professional Codes of Ethics in much of the western world. Since the beginning of the 1990s, the auditor independence construct has been imported eastwards and incorporated into legislation and Code of Practices amongst central and eastern European economies (CEE), together with other requirements, as the countries prepare for their accession to the European Union. This study is aimed at ascertaining the meanings conveyed by the auditor independence construct and its state of realisation in one of the transition economies of the CEE region, the Czech Republic. Also, the study seeks to understand how local culture impacts upon a particular understanding of auditor independence. In order to examine the auditor independence in this part of the world, a framework for analysis incorporating structural conditions, local traditions and culture is proposed. The analysis is conducted first de jure, and is based upon a review of the Czech law and professional regulation. This is complemented with a de facto analysis based upon interviews with audit practitioners, regulators and financial statement users in the Czech Republic and on a review of Czech media coverage. What emerges from the study is a particular local understanding of the auditor independence construct, perceived primarily as an economic concept in the context of market instability and the immature legal framework. It appears that there is a tendency to follow the form of audit procedures without substantial rationalisation. We conclude that socio‐economic and cultural pressures appear to far outweigh any formal safeguards implemented to maintain professional integrity and competence in the CEE region.
Sucher, P. and Kosmala‐MacLullich, K. (2004), "A construction of auditor independence in the Czech Republic: local insights", Accounting, Auditing & Accountability Journal, Vol. 17 No. 2, pp. 276-305. https://doi.org/10.1108/09513570410532456Download as .RIS
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