American Accounting Association’s Financial Accounting Standards Committee Comments on the ISB’s Exposure Draft ED 00-2: A Conceptual Framework for Auditor Independence

Association (hereinafter the Committee) is charged with responding to requests for input on issues related to financial reporting. The Committee is pleased to respond to the ISB's invitation to comment on the Exposure Draft ED 00-2: A Conceptual Framework for Auditor Independence (hereinafter the Exposure Draft). The comments in this letter reflect the views of the individuals on the Committee and not those of the American Accounting Association. Our response to the Exposure Draft is presented in three sections. The first section presents the Committee’s views as to characteristics of a conceptually sound framework for auditor independence, noting which of these characteristics are and are not contained in the Exposure Draft. The second section summarizes empirical academic literature on auditor independence that is relevant to the conceptual framework. The third section contains responses to the specific questions posed in the Exposure Draft. These responses are based on the views laid out in the first section and empirical academic research discussed in the second section. Conceptual basis for a framework for auditor independenc