Company Auditor & its Qualities

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 following qualifications and qualities:

Only the qualified chartered accountant can be appointed as auditor of a limited company.
The auditor must have thorough knowledge of principles and practice of all aspects of accountancy.
He must be familiar with all systems of accountancy in use.
He should have adequate knowledge of financial management, industrial administration and business organization.
He must have thorough knowledge of audit case laws as per the various cases decide by the courts in and outside India.
He should be able to understand the technical details of business whose accounts he is going to audit.
An auditor must be honest i.e. He must certify that he does not believe to be true and he must take reasonable care and skill before he believes what he certifies is true.
He must act impartially and not influenced by others, directly or indirectly while discharging his duties.
He should be hard working, systematic and methodical.
He must have the capacity to hear arguments of others.
He should have adequate skills and courage to write audit report correctly clearly and concisely.
He should not disclose the secrets of his client.

Comments

Banking system of India - Theory

#Reserve Bank of India is the central bank of the country and regulates the banking system of India. The structure of the banking system of India can be broadly divided into scheduled banks, non-scheduled banks and development banks. Banks that are included in the second schedule of the Reserve Bank of India Act, 1934 are considered to be Scheduled banks . All scheduled banks enjoy the following facilities: Such a bank becomes eligible for debts/loans on bank rate from the RBI Such a bank automatically acquires the membership of a clearing house. All banks which are not included in the second section of the Reserve Bank of India Act, 1934 are Non-scheduled Banks. They are not eligible to borrow from the RBI for normal banking purposes except for emergencies. Scheduled banks are further divided into commercial and cooperative banks. 1.Commercial Banks The institutions that accept deposits from the general public and advance loans with the purpose of earning profits are known as C...

Difference between Vouching , Verification and Valuation

Difference between Vouching , Verification and Valuation Vouching Verification Valuation Meaning Vouching is a process of comparing the entries in the books of accounts with the bonafide vouchers Verification is a process which proves the existence, ownership and title to the assets Valuation is a process which certifies the correct value of the assets and liabilities at the date of balance sheet. Subject Matter Vouching is made of the entries recorded in the books of original entry and their posting in the ledger Verification on the other hand is made of assets and liabilities appearing in the balance sheet at the end of the year Valuation is also made of assets and liabilities appearing in the balance sheet at the end of the year By whom Vouching is done by the senior auditor and audit clerks. Verification on the other hand is done by the auditor himself or his associates Verification on the other hand is done by the auditor himself or his associates When Vouching is done...

Basic Principles Governing an Audit

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 organ...

Wocop

Search This Blog