The Impact of Consulting Services on an Auditor’s Independence – A Survey Study on Audit Firms in Lebanon

As a result of the knowledge and experience they have, in addition to auditingfinancial statements for enterprises, auditors sometimes provide consulting services (nonauditservices). Some of these services might impair the auditors’ independence withregard to the enterprises.This study aims to identify the role of Lebanese audit firms in providing suchconsulting services and their impact on the Lebanese auditors’ code of professionalconduct. A well-structured questionnaire of three main domains was used to collect data.The samples were all members of Lebanese Association of Certified Public Accountants.The results of the study showed difference of statistical significance within the opinions ofthe study samples about the impact of consulting services on auditor independence. Thestudy includes a number of recommendations mainly:1. The Ministry of Finance and the Lebanese Association of Certified PublicAccountants must augment legislations related to violations and punishments againstLebanese audit firms which fail to comply with their professional duties upon providingconsulting services.2. The Lebanese Association of Certified Public Accountants should put forth auditcontrol to organize the actual practice of supplying consulting services by audit firms.3. Using the method of team auditing instead of individual auditing leads toenhancing auditor independence.4. Legislation related to commerce should include some articles which organize theprocess of changing the auditor, where essential reasons should be presented for a change.In addition, a change should not be allowed during the financial year which the auditor isauditing to protect and enhance the auditor’s independence.