An auditor's job description is internal documentation created to provide prospective auditors with an overview of the position's specifications. As a result, the duties of an auditor can provide auditing services as independent professionals or employees. When an auditor works for a company, he is referred to as an internal auditor, and an external agency provides independent auditing services to a corporation.
The very reason for employing an external auditor is to conduct an unbiased audit. And this is unaffected by any internal relationships that exist within the organisation. As a result, to become an auditor, a person must be a chartered accountant. However, suppose a company appoints an LLP as the company's auditor. In that case, the chartered accountant partners are authorised to function as auditors and have the right to sign on behalf of the firm.
Did you know?
An auditor is responsible for ensuring the reliability and accuracy of financial statements provided by a company's directors.
Who is an Auditor?
An auditor is somebody trained to review and verify accounting data and is recognised as a Chartered Accountant (CA) under the Chartered Accountant Act of 1949. According to the Companies Act of 2013, every firm must appoint an auditor.
Duties of a Company Auditor
Ideally, the role of an auditor includes the below functions:
Provide an Audit Report
The very reason for employing an external auditor is to conduct an unbiased audit. And this is unaffected by any internal relationships that exist within the organisation. As a result, to become an auditor, a person must be a chartered accountant. However, suppose a company appoints an LLP as the company's auditor. In that case, the chartered accountant partners are authorised to function as auditors and have the right to sign on behalf of the firm.
Make Inquiries
One of the most critical roles of the auditor is to ask inquiries when he deems fit. A branch auditor is responsible for carrying out all duties and responsibilities at the branch level, and he must also send the audit report to the company's auditor for review.
Also Read: Companies Act, 2013 - Appointment of Auditors
Duties Concerning Compliance
An auditor must ensure that he adheres to the government's auditing criteria. After consulting with the National Financial Reporting Authority (NFRA) and the Institute of Chartered Accountants of India, the central government established these criteria (ICAI). These criteria aid the auditor in conducting an efficient examination of the accounts.
Fraud Reporting
Because an auditor reviews a company's books of accounts, he may occasionally discover a fraudulent transaction. This is sufficient reason for the auditor to believe that someone committed fraud against the company. Because the company's authorities keep the books of accounts, the auditor must infer that some of the employees committed the fraud. In such circumstances, he must disclose the copy to the central government or the Company's Board of Directors, as the case may be.
Keep Integrity and Confidentiality
An auditor must learn to keep their identity private. He has access to sensitive company information while working as an auditor, and he must not reveal this information to anyone without the company's express permission. Furthermore, the auditor must be honest when auditing the accounting.
Assist With the Investigation
The systematic and rigorous examination of certain company records is called an investigation. An auditor carries out such an investigation when a flaw on the company's part already exists. The goal of the inquiry is to determine the cause and person involved in such an action. As a result, an auditor's responsibility is to assist the officers conducting such an investigation.
Respect the Codes of Ethics and Professional Conduct
The auditor, as a professional, must adhere to the Code of Ethics and the Code of Professional Conduct. Two parts of this are confidentiality and proper care to fulfil his tasks, and another essential element is professional scepticism. The auditor must be critical and on the watch for any accidents, errors or frauds in the financial records.
Give Their Opinion
In the auditor's report, the auditor must express their view. An opinion of this type can be qualified or unqualified. An unequivocal assessment concludes that the company's financial statements fairly portray its business in practically all significant aspects. It also specifies that the corporation complies with all applicable legislative requirements and Generally Accepted Accounting Principles (GAAP).
On the other hand, a qualified assessment believes that the company has addressed most difficulties except a few. It is the auditor's responsibility under this to provide even a negative opinion on the company's financial accounts. This opinion must be issued when the auditor disagrees with management about the applicability, acceptability or adequacy of accounting policies.
Scope of Duties of an Auditor
An auditor is a person chosen by a firm to examine the accuracy of the company's accounting records. According to the Duties of an Auditor Companies Act 2013, a company can appoint only a practising Chartered Accountant (CA) as a company's statutory auditor. The company auditor must also perform the professional obligations prescribed by the Chartered Accountants Act.
The role of an auditor is to deliver services approved by the Company's Board of Directors or the audit committee. The role includes collaborating with businesses and government organisations to study and solve problems and build policies and procedures compliant with existing regulations.
Rights and Duties of the Auditor
An auditor is a certified accounting professional who verifies individuals' and businesses' financial statements and records. They check to see if companies are following tax and legal requirements. Auditors detect anomalies, expose unintentional or intentional manipulation of economic data, and protect companies and financial institutions from fraud.
Duties of Company Auditor
A company's board of directors or management may appoint an internal auditor to analyse and audit its internal functions. Some corporations may recruit experienced auditors on a contract basis from auditing firms to function as internal auditors. They examine financial records and paperwork to ensure that they follow the law and regulations. They may discover ways to improve a company's procedures and provide recommendations to cut costs and waste. The auditor will visit with employees and management to gather information, analyse data, identify issues and weaknesses and assist managers in developing plans to reduce or eliminate errors.
Also Read: Audit Report Definition, Types, Format, Tools, and Sample
Roles and Responsibilities of the Auditor
The role of an auditor entails a great deal of responsibility and risk. Their work has an impact on a company's credibility and reputation. Auditors may specialise in compliance, regulation, legislation and taxation. To be a good auditor, you should be interested in assisting firms in optimising their operations and ensuring that their policies and procedures are to current regulations. You should be well-versed in the subject matter, objective, rational and detail-oriented.
Auditor duties and responsibilities include assisting organisations in improving the accuracy, efficiency or quality of some areas of their operations. While many auditors work in finance, these professionals may have expertise in several industries, and their job titles may differ to reflect their areas of concentration. An auditor's responsibilities also include bringing firm strengths and weaknesses to management's attention and advising them as they build answers or fixes for these concerns.
Conclusion
Internal audits guarantee compliance with tax rules, studying and reviewing accounting systems and tax control units to lower taxes. Maintaining needed tax paperwork, supporting firms with tax returns and generating tax audit reports are all tasks of a tax auditor. The auditor generally simplifies the work and the tax documents and makes the organisation follow strict rules. If the auditor catches the company having false documents, the auditor has all the right to cancel the company's licence. The company needs to make sure they follow all the rules and regulations of the government to do the audit correctly.
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