Question: Discussion Question The SEC has been concerned with the independence of external auditing firms. It is especially con-cerned about how large nonaudit (such as consulting)

Discussion Question

The SEC has been concerned with the independence of external auditing firms. It is especially con-cerned about how large nonaudit (such as consulting) fees might impact how aggressively auditing firms pursue accounting issues they uncover in their audits. Congress passed legislation that prohibits accounting firms from providing both consulting and auditing services to the same client.

How might consulting fees affect auditor independence?

What other conflicts of interest might exist for auditors?

How do these conflicts impact the governance process?

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