Perceptions of auditor independence in Barbados

Purpose - The study investigates the perceptions of auditor independence (PAI) between auditors and users in Barbados. Design/methodology/approach - A self-administered questionnaire was adapted and modified from Beattie et al.'s study in the UK the sample included 66 auditors and 148 users. Factors relating to the size and closeness of Barbadian society, lengthy tenure and being a sole audit practitioner, small audit firm, provision of non-audit services (NAS) among others, were investigated. Findings - Economic dependence of auditor on the client, the provision of NAS, high competition, small firm size, being a sole practitioner, lengthy tenure and the size and closeness of Barbadian society were found to negatively affect PAI. Auditor independence was perceived to be enhanced by the existence of audit committees, rotation of audit partners, risks to auditor arising from poor quality, regulatory rights and requirements surrounding auditor change and an auditor's right to attend and be heard at the company's annual general meetings. Research limitations/implications - Owing to the relatively small sample size and small emerging market, these findings should be interpreted with caution. Practical implications - This research serves to inform audit related policies and regulation on the potential threats to auditor independence. Originality/value - This paper contributes to the limited body of research on auditor independence in small developing countries.