Which is a common criticism of external auditors?

One of the most notable criticisms of external auditors is their lack of independence. This concern arises from the potential conflicts of interest that can emerge when auditors have close relationships with the clients they are auditing. If an auditor is perceived to have financial interests or personal ties with the audited entity, it can undermine the objectivity and impartiality that are critical to the audit process. When auditors are not fully independent, there is a risk that they may overlook significant issues or fail to report negative findings, which can compromise financial reporting reliability and stakeholder trust.

Maintaining independence is essential for ensuring the credibility of the audit, as it reassures stakeholders that the audit findings are based on objective evaluations rather than influenced by outside relationships or pressures. This criticism has led to the establishment of strict regulatory standards aimed at enhancing auditor independence, including prohibitions against certain relationships and services provided to audit clients. As such, a lack of independence is a prevalent and justifiable concern within the auditing profession.