What are the duties and responsibilities of auditor?

What are the duties and responsibilities of auditor?

Duties of the Auditor

  • Prepare an Audit Report.
  • Form a negative opinion, where necessary.
  • Make inquiries.
  • Lend assistance in case of a branch audit.
  • Comply with Auditing Standards.
  • Reporting of fraud.
  • Adhere to the Code of Ethics and Code of Professional Conduct.
  • Assistance in an investigation.

What are the auditors legal liabilities to shareholders?

The auditor’s liability represents the legal liability that is assumed when the auditor is performing professional duties. The auditor is liable for client accounting misstatements in the financial statements. There is always the risk of fraud and material misstatement in financial statements.

Why audit is important to the shareholders?

An audit is important as it provides credibility to a set of financial statements and gives the shareholders confidence that the accounts are true and fair. It can also help to improve a company’s internal controls and systems.

What are the duties and liabilities of a company auditor?

To safeguard the interests of the shareholders and the company he must exercise reasonable care and skill in the performance of his duties . If he fails to do so, and shareholders or company suffers any loss, the auditor will be held liable to make good the loss.

Do auditors owe a duty of care to shareholders?

Auditors owe a duty of care to shareholders as a body. Their audit report is addressed to all shareholders. Auditors do not owe a duty of care to individual shareholders. A statutory right of shareholders to put questions to auditors may potentially widen that duty of care to each shareholder asking a question.

Are auditors liable to third parties?

Auditors will have the same duties and liabilities to their clients as they have always had. b) This wording does not mean that auditors will never agree to take on responsibilities to third parties such as lenders. All it does is make clear that auditors will only accept duties that are expressly agreed.

Why do external auditors report to shareholders?

Shareholders and other users of the financial statements As the auditor’s report is addressed to the shareholders of the company, it implies that the KAMs were identified with these users of the financial statements in mind.

Are auditors agents of shareholders?

Auditors act as agents to principals (shareholders) when performing an audit and this relationship brings similar concerns with regard to trust and confidence as the director-shareholder relationship. Like directors, auditors will have their own interests and motives to consider.

What are the responsibilities of the external auditors?

An external auditor reviews the financial information of a company and reports on findings. The external auditor is responsible for investigating financial statements for errors and fraud, performing audits on operations, and reporting on findings, and providing recommendations.

How can auditors protect the rights of the shareholders of the company?

An auditor has a fiduciary relationship vis-a` vis the shareholders as a body. The audit is intended for the protection of the shareholders and the auditor is expected to examine the accounts maintained by the directors with a view to inform the shareholders of he true financial position of the company.

What are the professional ethics of auditor?

The IFAC Code of Ethics specifies the fundamental principles to be respected by auditors and accountants, namely: integrity, objectivity, professional competence and due care, confidentiality and professional behaviour.