THE INDEPENDENCE ISSUE AND AUDIT A COMPARATIVE STUDY OF PORTUGAL (EU) AND NORDIC COUNTRIES - A THEORETICAL APPROACH

Abstract

The objective of this paper is to speak about the issue of independence. To reach this goal corporate governance was considered as an example of good practices that may help organizations prevent fraud. Fraud was considered under a perspective of financial engineering - dedicated to building, enabling and displaying high dividends to shareholders that were non-existent. These events defrauded public opinion on the trust in the auditor and the confidence in the companies and showed the lack of independence of the different players. It must be said that the participation in these frauds was shared, at least, by the top management, the auditors and the accounting personnel. As an immediate consequence some ethical issues and guidelines for the reinforcement of the organization´s internal control arose. As concerns the factor of independence, particular stress on the supervising and inspecting functions of the Portuguese Stock Commission –CMVM - was considered. This entity is responsible for the supervision of the listed companies but at the same time it inspects the auditor´s work for the companies in its portfolio. A benchmarking analysis with the Nordic countries of Norway, Sweden and Finland was done. This was undertaken because these countries show some relevant cultural and ethical differences and a peculiar cultural/organizational approach that should be considered.