STRUCTURING A PUBLIC ACCOUNTING AUDIT INDEPENDENCE THEORY FROM A DOCUMENT STUDY OF U.S. CONGRESSIONAL TESTIMONY (UNITED STATES)

Federal securities laws (and American Institute of Certified Public Accountants practice standards) require examination of public corporation financial statements by public accountant auditors who are independent. This research asks and answers the question: What meaning does the word "independence" have when used in its adjective form to describe public accountant auditors?;The ultimate result is an answer to the above question: A public accountant auditor is independent only if he or she acts only on the public investor's behalf as an advocate of the public interest and has no association or relationship with the auditee organization such that the interests of the auditee could influence the audit judgment making of the auditor. The research proposes many other questions, answers, and hypotheses for additional research.;The Appendix includes a proposal recommending and outlining in detail further independence research; it requires the participant-observation research method.;The researcher adopts the grounded theory approach to social theory construction, employs a qualitative content analysis of U.S. Congressional documents, utilizes a classification research strategy, and analyzes the data using the constant comparative analytic method with semantical analysis. The data base documents are: (1) U.S. Congressional hearings and reports preceding enactment of the Securities Act of 1933 and the Securities Exchange Act of 1934, and (2) U.S. Congressional hearings and reports on the subject of the public accounting profession occurring during the period 1976 to 1980.