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Auditor’s Independence: Increasing Expectations and Expanding Responsibilities in the Early 1930s
Diane H Roberts,
University of San Francisco
ABSTRACT. Auditor independence is an aspect of professional ethics crucial to user confidence in contemporary times and the early 1930s. Primary sources that reflect the thinking of the leaders of the accounting profession in the United States are examined to determine the profession's stance on independence issues. The period examined begins with the stock market crash of October 1929 and ends with the American Institute of Accountants' (AIA) fiftieth anniversary meeting in 1937. Thus both events leading up to and immediately following the passage of US Federal Securities Acts of 1933 and 1934 are examined. Although ownership interests in clients and dual status as director and auditor were among the practices of this time period, much of the rhetoric surrounding the issue of auditor independence is hauntingly familiar to modern ears. Advancing the private interests of the accounting profession appears to be the primary emphasis instead of protecting the public’s interests.
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