Audit means check of the accounts at the end of the year after preparation of accountancy. An auditor must have knowledge of accounting. When any person goes in company for auditing then they must have a technical knowledge of audit. An audit is just like a watchdog of the company. As dog always think about the owner of the house as it the same way auditor always think about the owner of the company.
Duty of the auditor is not harm to the other person. He is always sincere, systematic, honest, truthful, and tactful. An auditor has a professional knowledge and expert in own field. In case of any unwanted situation. The remedial action has to come from the owner of the entity. He has to discharge his responsibility by informing about the irregularity found in the audit.This task is so difficult because people tried who arise fraud in the company gives wrong information to the company.
Definition of Auditing:
According to institute of chartered Accountant of India,
“Auditing is a systematic and independent examination of data, statements, records, operations and performance (financial or otherwise) of an enterprize for a stated purpose. In any auditing situation, the auditor perceives and recognizes the propositions before him for examination, collects evidence, evaluates the same and on this basis, formulates his judgment which is communicated through his audit report.”
Duties of an auditor
- changes in accounting policy which have the effect of misrepresenting the financial position;
- transactions or conditions which give rise to potential exposure or exposure which may jeopardize viability;
- transactions or conditions which indicate that internal controls are significantly weak;
- transactions that are irregular and that have a significant or material impact on the financial position;
- transactions or conditions that contravene the Acts or regulations as regards capital adequacy or liquidity requirements;
- transactions or conditions which in the opinion of the auditors ought to be included in such a report.
