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    Assurance worlds: Consumers, experts and independence
    research summary posted April 1, 2015 by Jennifer M Mueller-Phillips, tagged 04.0 Independence and Ethics, 09.0 Auditor Judgment 
    Assurance worlds: Consumers, experts and independence
    Practical Implications:

    The author provides a commentary analyzing audit principles as they relate to studies chosen by the author. The analysis is helpful in understanding practical implications of audit principles in other assurance industries. The studies analyzed by the author provide real world examples of how audit independence, audit process, and assurance services can be viewed in a different light. The commentary provides these examples in order to examine criticisms that have been leveled against the industry relating to the principles mentioned above.

    For more information on this study, please contact Michael Power (


    Power, M. 2011. Assurance worlds: Consumers, experts and independence. Accounting, Organizations and Society 36 (4-5):324-326.

    Purpose of the Study:

    The author describes the findings in three key studies on audit principles. The principles include:

    • Auditor Independence
    • Audit Expertise
    • Audit Process
    • To whom assurance is provided

    The author summarizes the findings to address the criticisms of the accounting profession as they relate to the principles mentioned above.

    Design/Method/ Approach:

    The author obtained three studies and provides analysis of the studies in the form of a commentary. The author addresses economic factors from 2010 and 2011. 

    • The author finds that a study conducted by Jamal and Sunder (2011) provides an example on how a market creates a demand for certification and grading services. The study analyzes the baseball card industry and it is observed that authenticated cards generate more value in the industry. As confidence grows in the grading services, so does the market and value of the products. However, the author notes that independence is not valued as highly as in the audit industry. The authors notes that independence is a product of the market dynamic itself. The author emphasizes that independence may be valued improperly according to the market value that is associated with it.
    • The author finds that a study conducted by Jeacle and Carter (2011) provides another concept for assurance services. By examining the TripAdviser model, the author examines how the majority provides assurance about the minority. In this case the majority are the hotel users and the minority represents the hotels themselves. The assurance is provided by ratings issued by the users. Besides the monopoly power and potential issues for misuse, the auditor believes that this particular model may provide more markets for assurance services.
    • The author finds that a study conducted by Downer (2011) provides a relationship between aircraft design safety and the approach that could be used by auditors providing assurance for banks. High reliability technology environments are subject to non-redundantly structured information technology. The overall audit takeaway is that historical information provides assurance in this area by accumulating knowledge over time. Auditor judgment plays a role in this type of environment.
    Auditor Judgment, Independence & Ethics