Title: Auditor - Client Dynamics: Analysis Of Threats And Their Influence On The Perceived Independence Of Auditors In Pampanga
Authors: Alaysa B. Lapuz, Jennica Mae M. Manabat, Angela Luisa M. Manalansan, Charina D. Paule , Alan Cabaluna, PhD Jason Y. Carreon, CPA,MBA
Volume: 10
Issue: 7
Pages: 349-360
Publication Date: 2026/07/28
Abstract:
In the field of audit, independence of the auditor is an essential foundation to ensure credibility and maintain the public's trust in financial reporting. Hence, auditors and client dynamics often create threats that impairs this objectivity. This study examined the influence of these threats namely familiarity, self-interest and self-review on the perceived independence of external auditors in Pampanga, Philippines. Utilizing a quantitative descriptive-causal research design, data were gathered from 40 Certified Public Accountants (CPAs) with external auditor's experience. The findings revealed that Self-Interest threat is identified that most influences independence. Despite these recognized risks, both Independence of Mind and Independence in Appearance received high, identical ratings (M = 3.39, "Strongly Agree"), indicating that auditors in Pampanga maintain their level of professional integrity. The results confirmed that audit threats significantly influence the perceived independence of auditors. The study concludes that practitioners in Pampanga demonstrate high ethical resilience, likely due to strict adherence to the Philippine Standards on Auditing (PSA) and effective professional safeguards. Consequently, the researchers recommend that professional bodies and audit firms continue to prioritize ethical training and regulatory compliance to sustain public confidence amidst evolving auditor-client dynamics.