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etween accountancy companies and their clients’ management is also a characteristic of auditing rather than of the NAS.
The provision of the NAS is a means of increasing firm revenues. It does not conflict with the auditing characteristics. Therefore, there is no evidence that the NAS impairs auditing independence. If seeking a maximum profit means impairment of independence, the auditing itself has already impaired the audit independence. Therefore, we can conclude that as independent accountants, auditors are capable enough to act independently, with or without advisory services. ‘As has been pointed out by others, the appearance of independence is almost as important as independence itself. Unless auditing has the confidence and respect of those who use its services, such services will not long be in demand and certainly will not be expanded into the broader areas of public policy.’ (Mautz and Sharaf, 1985, p213) If this is not the case (i.e. the auditors are not capable to act independently), the banning of the advisory services will lead to more audit fraud as auditing itself is the only way to make the profit.
In fact, the accountancy firms are more willing to act independently to keep their reputation in order to attract bigger clients and earn greater profit.
The history and development of Non-audit services
In order to analyze the relationship between the audit and NASs, it is necessary to look at the auditing history.
In fact, the major functions of the accountancy companies were making financial reports and providing NASs since the eighteen century.  As Previts and Merino stated, ‘until the 1933 and 1934 federal securities acts, public demands for audits decreased, and the profession’s obligation to third parties was obscured. The direction and growth of accounting practice was in the area of credit reports to bankers, as advisors to businessmen, and as tax experts. The New York Stock Exchange consistently refused to acknowledge the need for independent audits of listed companies before 1926.’ Obviously, the consultancy services, prior to audit services, were normal services provided by accountancy companies. Just as Previts and Merino (1979) addressed, the public and regulators didn’t pay much attention to audit services until the 1920’s. The audit work took no more than 50% of total services provided by the accountancy firms until the last century. Take the instance of Whinney，Smith & Whinney, one of the oldest British accountancy practices, which has been providing no audit services since their establishment. (See table 1) However, it did not provide audit services until the 1860’s. “An early recognition of the expanding scope of services offered by auditors was found in a statement adopted by AICPA Council in 1947. The services described in that statement were tax advice, accounting assistance, advice to businesses in the installation of accounting and cost systems, budgeting and internal control. However, independence concerns were not raised at that time.”
Table 1:The percentage Composition of Whinney, Smith and Whitnney’s Fee Income (1848-1960)
Year Insolvency Accounting Auditing Taxation Trustee & Executorships Special Work Total
1848-1859 77.93% 12.29%   7.13% 2.65% 100.00%
1860-1869 89.69% 6.03% 1.93%  2.16% 0.20% 100.00%
1870-1879 93.63% 2.38% 2.18%  1.74% 0.07% 100.00%
1880-1889 61.00% 9.63% 23.38%  4.03% 1本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。