Role, Duties and Responsibilities of Auditors

Role, Duties and Responsibilities of Auditors - Role Duties...

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Unformatted text preview: Role, Duties and Responsibilities of Auditors 13 Jan 2012 2 Roles, Duties & Responsibilities of Auditors • Roles of Shareholders, Board of Directors, Management • Today, we will study the role, duties and responsibilities of auditors in a company’s corporate governance • Recent collapse of different companies have brought into focus this issue of auditors. As, audit companies have indulged themselves into unethical practices. Different countries have developed and are developing different regulations to watch, monitor the audit companies and their functioning. 3 Roles, Duties & Responsibilities of Auditors Definition of Audit: • The Institute of Chartered Accountants of India (ICAI) has defined audit as, “the independent examination of an entity, whether profit oriented or not and irrespective of size or legal form, when such an examination is conducted with a view to expressing an opinion thereon” (Fernando 2009) • In other words, auditing is the process, by which a competent independent person objectively obtains and evaluates evidence regarding assertions about an economic activity or event for the purpose of forming an opinion about and reporting on the degree to which the assertion conforms to an identical set of standards. 4 Roles, Duties & Responsibilities of Auditors Objectives of an Audit: • The objectives of an audit of financial statements is to enable an auditor to express an opinion on financial statements which are prepared within a framework of recognised accounting policies and practices and relevant requirements (Fernando 2009) • The overall objective of the audit of the financial statements of an entity is to gather and evaluate audit evidence of sufficient quantity and appropriate quality in order to form, and communicate to the users of the financial statements, an audit opinion on the reliability of the assertions of management inherent in those financial statements for the purpose of adding credibility to those assertions. ( http://www.abrema.net/abrema/aud_obj_g.html ) 5 Roles, Duties & Responsibilities of Auditors Role of Auditors: International Audit Standards maintain that an auditor's mandate may require him to take cognizance and report matters that come to his knowledge in performing his audit duties which relate to: – Compliance with legislative or regulatory requirements;...
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This note was uploaded on 03/07/2012 for the course FINANCE 245 taught by Professor Hameed during the Spring '12 term at IMSciences.

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Role, Duties and Responsibilities of Auditors - Role Duties...

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