Nga Thanh DOAN, Cuong Duc PHAM, Thuong Thi Uyen NGUYEN, Mai Phuong VU, Lam Ha PHAM / Journal of Asian Finance, Economics and Business Vol 7 No 12 (2020) 445–453 445 445 Print ISSN: 2288-4637 / Online ISSN 2288-4645 doi:10.13106/jafeb.2020.vol7.no12.445 The Effect of Non-Audit Services on Auditor Independence: Evidence from Vietnam Nga Thanh DOAN 1 , Cuong Duc PHAM 2 , Thuong Thi Uyen NGUYEN 3 , Mai Phuong VU 4 , Lam Ha PHAM 5 Received: September 01, 2020 Revised: October 26, 2020 Accepted: November 05, 2020 Abstract Independence is a factor which has a significant impact on auditing quality, especially in the recent times where the marketplace is increasingly demanding transparency. The independence of auditors is assessed based on the main criteria such as the reliability of the audit opinions, the accuracy, truthfulness of financial reports, and the objectivity in the opinions of the auditor. The study investigates the effects of non-audit services (NAS) on auditor independence in emerging economies such as Vietnam. Non-audit services include taxation services, management advisory services and outsourcing internal audit services. Based on previously relevant researches, the authors develop hypotheses and a regression model about non-audit services (independent variables) and audit independence (dependent variable). The research collects data by 5-scale Likert questionnaire. The findings indicate the relationship between NAS and auditor independence. Specifically, the results reveal two main factors that have influence on auditor independence, namely, taxation services and management advisory services. The results of our research can be considered as new findings and can be compared to previous researches in Vietnam, which establishes a new viewpoint about the relationship between the NAS and the independence of the auditor. This result can be implemented for countries or jurisdictions which are similar to Vietnam. Keywords: Audit, Auditor Independence, Non-audit Services JEL Classification Code: M40, M42, M48 Moreover, independence is not the only essential condition for a company to achieve certain aims in auditing but also a critical principle to auditors. NAS, together with independence, is a considerable cause of concern these days. Under the pressure of brand reputation and profit making for administration, many audit firms recently provide NAS in addition to their audit services, such as management advisory services, information system services, taxation services. Changes in the proportion of audit firms’ services give rise to a problem relating to the provision of NAS and whether it affects auditor independence. In order to clarify this issue, various researches investigating the relationship between NAS and auditor independence have been undertaken, including those by Blay and Geiger (2013) in the United States, Ratzinger-Sakel (2013) for Germany, and Habib and Islam (2007), who chose Bangladesh to prove their hypothesis. In Vietnam, regulations on the independence of the auditor are given in legal documents. However, the influence of providing NAS on auditor independence is still one of the most concerning subjects, due to its far-reaching impact on many business entities and state agencies’ operation. 1. Introduction Independence is a factor which has a significant impact on auditing quality, especially in the recent times where the marketplace is increasingly demanding transparency. 1 First Author. Lecturer, Auditing Department, School of Accounting and Auditing, National Economics University, Vietnam. Email: doanthanhnga@neu.edu.vn 2 Corresponding Author. Associate Professor, Head of Accounting Principles Department, School of Accounting and Auditing, National Economics University, Vietnam [Postal Address: 207 Giai Phong, Hai Ba Trung, Hanoi, 113068, Vietnam] Tel: +84 972 346 699. Email: cuongpd@neu.edu.vn 3 School of Accounting and Auditing, National Economics University, Vietnam 4 School of Accounting and Auditing, National Economics University, Vietnam 5 School of Accounting and Auditing, National Economics University, Vietnam © Copyright: The Author(s) This is an Open Access article distributed under the terms of the Creative Commons Attribution Non-Commercial License (https://creativecommons.org/licenses/by-nc/4.0/) which permits unrestricted non-commercial use, distribution, and reproduction in any medium, provided the original work is properly cited.