Tuesday, 10 March 2020

Role and Responsibilities of Auditors

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Role and Responsibilities of Auditors


In recent times our understanding of corporate governance has changed considerably.
Traditionally the corporate governance was seen as a system that ensures that the manager
does not take decision for private gains and does not expropriate shareholders’ wealth.
But now the perception is changed, and the corporate governance is taken in a broader
sense.
It is now perceived as a system that ensures optimal utilisation of resources for the benefit
of shareholders while meeting societal expectations.
It addresses topics such as improving the publication of important information, the
protection of shareholders’ rights, promotion of balance of interests between managers,
shareholders and other stakeholders; the independence of the board of directors, internal
control systems and the function of audit.
An auditor has an important role regarding the financial well-being of a company or
corporation. Auditor has to perform a wide variety of duties and tasks related to the
financial matters of an entity.
The general responsibilities of an auditor, is related to ensure financial compliance. The
auditors collect and examine financial records to ensure that they are up to date and to
make sure that the organisation abides by pertinent laws and regulations with regard to
their finances.


Audit: Examination and verification of a company’s financial and accounting records and
supporting documents by a professional
Audit Committee: Operating committee of the Board of Directors charged with oversight of
financial reporting and disclosure.
External Auditors: Independent public accountant (not an employee of the company) who
examines a business entity’s books.
Generally Accepted Auditing Standards: Sets of standards against which the quality of audits is
performed and may be judged.
Generally Accepted Accounting Principles: Common set of accounting principles, standards and
procedures that companies use to compile their financial statements.

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