Nextcard Inc.

NEXTCARD AUDIT MANIPULATION Name Institution Affiliation Course Date of Submission Introduction The central function of that is served by auditors is independence, but managers may be having interest in exaggerating, misrepresenting, and falsifying reports with respect to the performance of a firm. It is thus, imperative for an independent audit report to provide credible and unbiased appraisal regarding a firm’s financial status. Numerous legal decisions have reinforced the code of professional ethics to reflect the significance of independence of auditors. The issue of auditor independence is analyzed sometimes explicitly or implicitly that the auditor’s bias is a matter of choice, as they are assumed to have the ability to conduct high quality and unbiased audits (Antle, 1984). Biasness is perceived to be a deliberate response to incentives due to conflict of interests that become impossible for auditors to avoid. The evaluation of evidence is in a selective manner when auditors have a stake to reach a particular conclusion, which makes them to focus on evidence that supports their conclusion evaluating the evidence in uncritical manner. The presentation of conflict by the evidence present and the desired conclusion, results to either auditors ignoring it or subjecting the conflict to a particular critical scrutiny (Antle, 1984). The processing of information is strong to the people exposed to the information as it holds their position. Accountability y influences people to evaluate information showing concerns regarding how their decisions will be received. The failure of auditors to understand their audience preference results to a systematic cognitive processing coupled with a thorough justification of their conclusion (Diekmann, 1997). There is little doubt with respect to audience preference of the client firm to get unqualified audit report, but the effect of accountability does not include rewards for consenting with individuals who are account...