Linking Auditor Independence and Audit Quality: A Review and Synthesis of Academic Literature from 2015–2025

SUMMARY

This paper synthesizes academic studies published between 2015 and 2025 examining the relation between auditor independence and audit quality. We review evidence from the literature related to regulatory and professional factors (e.g., nonaudit services, auditor tenure, auditor switching), organizational factors (e.g., client importance, client dismissal of the auditor, social bonding), and individual auditor attributes (e.g., professional skepticism, expertise, and ethical orientation). Contemporary auditor independence research reports mixed and context-specific findings. For example, nonaudit services can either impair or enhance audit quality depending on service type, regulatory safeguards, and knowledge spillovers. Mandatory partner rotation tends to enhance audit quality, although mandatory firm rotation yields limited benefits and higher costs. We highlight the need for more research on independence and auditors’ duty to the public interest, proposing future directions to inform policy, practice, and standard setting.

JEL Classifications: M40; M42; M48.