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Who Is an Auditor? An auditor is a person authorized to review and verify the accuracy of financial records and ensure that companies comply with tax laws. They protect businesses from fraud, point out discrepancies in accounting methods and, on occasion, work on a consultancy basis, helping organizations to spot ways to boost operational efficiency . Auditors work in various capacities within different industries. The main duty of an auditor is to determine whether financial statements follow generally accepted accounting principles (GAAP). The Securities and Exchange Commission (SEC) requires all public companies to conduct regular reviews by external auditors, in compliance with official auditing procedures. There are several different types of auditors, including those hired to work in-house for companies and those who work for an outside audit firm. The final judgment of an audit report can be either qualified or unqualified. Qualities of an Auditor: The Auditor must possess the

  Qualifications of an Auditor: A person shall be eligible for the appointment of an auditor of a company only if he is a chartered accountant. Where a firm including a limited liability partnership is appointed as an auditor of a company, only the partners who are chartered accountants shall be authorized to act and sign on behalf of the firm. Disqualifications of an Auditor: The following persons shall not be eligible for the appointment as an auditor of a company: An officer or employee of the company. A person who is a partner, or who is in employment or an officer or employee of the company. A person or a firm who, whether directly or indirectly has a business relationship with the company, or subsidiary of such holding company or associate company of such nature as may be prescribed. A person whose relative is the director or is in the employment of the company as a director or key managerial personnel. A person who is in full-time employment elsewhere or a person or a partner of

  SA- 200 describes the nine basic principles that govern the procedure of auditing. It lists out the roles and responsibilities of the auditor and his general code of conduct during an audit.  1] Integrity, Independence and Objectivity The auditor has to be honest while auditing, he cannot be favoring the organization. He must remain objective throughout the whole process, his integrity must not allow any malpractice.  Another important principle is independence. So the auditor cannot have any interest in the organization he is auditing, which allows him to be independent and impartial at all times. 2] Confidentiality The auditor has access to a lot of sensitive financial information of the organization. It is important that he respect the confidential nature of such information and documents. He cannot disclose any sensitive information to any third party unless it is a requirement by law. And he must also be very careful with documents, certificates etc. that the organization entrus

Audit Notebook : An audit notebook is a diary or registers maintained by audit staff to note errors, doubtful quarries and difficulties. The purpose is to note down the various points which need to be either clarified with the client or the chief editor. The Audit notebook is used for recording important points to be included in the auditor’s report. Contents of an Auditor’s Note Book: 1. A list of books of accounts maintained. 2. The names, duties and responsibilities of principal officers. 3. The particulars of missing receipts and vouchers. 4. Mistakes and errors detected. 5. The points which need clarifications and explanations. 6. The points deserving the attention of the auditor. 7. Various totals and balances. 8. The Points to be a part of the auditor's report. Advantages of Audit Notebook: Some of the advantages of the audit notebook are: It ensures uniformity and helps in knowing the amount of work performed. Important matters relating to the audit work may be easily recal

Based on ownership: On the basis of ownership audit can be:- 1. Audit of Proprietorship: In case of proprietary concerns, the owner himself takes the decision to get the accounts audited. Sole trader will decide about the scope of audit and appointment of auditor. The auditing work will depend upon the agreement of audit and the specific instructions given by the proprietor. 2. Audit of Partnership: To avoid any misunderstanding and doubt, partnership audits their accounts. Partnership deed on mutual agreement between the partners may provide for audit of financial statements. Auditor is appointed by the mutual consent of all the partners Rights, duties and liabilities of auditor are defined in the mutual agreement and can be modified by the partners. 3. Audit of Companies: Under companies Act, audit of accounts of companies in India is compulsory. Chartered accountant who is professionally qualified is required for the audit of accounts of companies. Companies Act 1913 for t

   The importance of auditing can be judged from the fact that even those organizations which are not covered by the companies Act get their financial statements audited. It has become a necessity for every commercial and even non-commercial organization. The importance of auditing can be summed in following points: Audited accounts help a sole trader in knowing the value of the business for the purpose of sale. Dispute over the correctness of profits can be avoided. Shareholders, who do not know about the day-to-day administration of the company, can judge the performance of management from audited accounts. It helps management in detecting and preventing errors and frauds. Management gets advice on financial affairs from the auditors. Long and short term creditors depend on audited financial statements while taking decisions to grant credit to business houses. Taxation authorities depend on audited statements in assessing the income tax, sales tax and wealth tax liability of the bus

Introduction to Auditing Meaning and Definition of Auditing The word Audit is derived from Latin word “Audire” which means ‘to hear’. Auditing is the intelligent and critical test of accuracy, adequacy and dependability of accounting data and accounting statements. Different authors have defined auditing differently, some of the definition are: “Auditing is an examination of accounting records undertaken with a view to establishment whether they correctly and completely reflect the transactions to which they purport to relate.”-L.R.Dicksee “Auditing is concerned with the verification of accounting data determining the accuracy and reliability of accounting statements and reports.” - R.K. Mautz “Auditing is the systematic examination of financial statements, records and related operations to determine adherence to generally accepted accounting principles, management policies and stated requirement.” -R.E.Schlosser Objectives of Auditing The objectives of auditing are changing with the