Auditor independence: a company's statutory auditor cannot serve as its internal auditor due to conflict with objective reporting. The internal auditor is appointed by management and functions in an employee-like capacity, while the statutory auditor is appointed to perform independent reporting obligations and must assess internal control procedures and the existence of an internal audit system; if the same person served as both, they could not provide the independent and objective report required, and therefore a statutory auditor cannot also be the company's internal auditor.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Auditor independence: a company's statutory auditor cannot serve as its internal auditor due to conflict with objective reporting.
The internal auditor is appointed by management and functions in an employee-like capacity, while the statutory auditor is appointed to perform independent reporting obligations and must assess internal control procedures and the existence of an internal audit system; if the same person served as both, they could not provide the independent and objective report required, and therefore a statutory auditor cannot also be the company's internal auditor.
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