THE AUDITOR,QUALITIES OF AN AUDITOR

Ø  THE AUDITOR,QUALITIES OF AN AUDITOR
CHAPTER 1
AUDITING

CHAPTER 1
AUDITING

Ø  SCHEDULE OF THE VIDEOS  ON AUDITING

• ALREADY COVERED

1. NATURE OF AUDITING
2. SCOPE AND BASIC PRINCIPLE GOVERNING AUDIT
3. OBJECTIVE OF AUDITING
4. CLASSIFICATION OF AUDITING
5. TWO OR THREE VIDEOS ON AUDITING PER WEEK

• A NEW CHANNEL SHASHI AGGARWAL ECONOMICS AND LAW CLASSES IS OPENED AND STARTED PUTTING VIDEOS ON PRINCIPLES OF ECONOMICS,BUSINESS ECONOMICS AND BUSINESS LAW II

Ø  MEANING OF THE AUDITOR

a)    THE PERSON WHO CONDUCTS AN AUDIT IS KNOWN AS AUDITOR.

b)    AFTER DUE EXAMINATION OF ACCOUNTING ,RECORDS AND STATEMENTS.A REPORT IS PREPARED IN THE FORM OF OPINION BY THE AUDITOR AND PRESENTED TO THE PERSON WHO APPOINTS THE AUDITOR

c)    IN INDIA ONLY CHARTERED ACCOUNTANTS ARE PROFESSIONALLY QUALIFIED FOR THE AUDIT OF ACCOUNTS OF COMPANIES.

• FUNCTIONAL CLASSIFICATION OF AUDITORS

1. EXTERNAL AUDITORS:-WHO PRACTICE THE PROFESSION OF ACCOUNTANCY HAVING QUALIFICATION IN PROFESSIONAL EXAMINATION AND ARE EXTERNAL TO THE ORGANIZATION. THEY ARE APPOINTED BY THE OWNERS OF THE ORGANIZATION E.G IN CASE OF COMPANY BY THE SHAREHOLDERS. AN AUDITOR IS GENERALLY INDEPENDENT EXTERNAL AUDITOR. WHEN AN EXTERNAL AUDITOR IS APPOINTED BY PARTICULAR STATUTE,SUCH AUDITOR WILL BE KNOWN AS THE STATUTORY AUDITOR.
2. INTERNAL AUDITORS : THEY ARE APPOINTED BY THE MANAGEMENT. THEY MAY BE APPOINTED EITHER ON CONTRACT BASIS OR AS EMPLOYEE TO UNDERTAKE AUDITING OF BOOKS AND ACCOUNTS.MAY BE PROFESSIONALLY QUALIFIED. SCOPE OF INTERNAL AUDITOR MAY EXTEND EVEN BEYOND THE FINANCIAL ACCOUNTING AND MAY INCLUDE INVESTIGATION,PRODUCTION AUDIT,PERFORMANCE AUDIT

• QUALITIES OF THE AUDITOR

1. INTEGRITY: MEANS AUDITOR SHOULD BE HONEST,SINCERE AND STRAIGHT FORWARD IN HIS APPROACH TO PROFESSIONAL WORK
2. INDEPENDENCE :-HE MUST NOT BE INFLUENCED BY HIS CLIENT OR ANY OTHER PERSON. HE SHOULD GIVE HIS JUDGMENT INDEPENDENTLY. THE BASIC OBJECTIVE OF AUDIT IS EXPRESSION OF INDEPENDENT OPINION ON HIS FINANCIAL STATEMENTS.
3. OBJECTIVITY:-THE VIEW POINT OF AUDITOR SHOULD BE FAIR,UNBIASED AND IMPERSONAL. HIS OPINION SHOULD BE BASED ON OBJECTIVE CONSIDERATION.
4. LOGICAL ABILITIES:- HE SHOULD HAVE THE CAPACITIES TO ANALYZE AND INTERPRET PROBLEMS AND FACTS
5. AWARENESS:-HE SHOULD BE AWARE OF VARIOUS ECONOMIC,LEGAL TECHNOLOGICAL FACTORS AS WELL AS PROFESSIONAL DEVELOPMENTS
6. COMMUNICATION ABILITIES:HE MUST BE PROFICIENT IN COMMUNICATION WHETHER WRITTEN OR ORAL
7. TACTFULNESS:-HE SHOULD DEAL ALL THE PEOPLE TACTFULLY
8. CONFIDENTIALITY: HE MUST MAINTAIN CONFIDENTIALITY
9. HE SHOULD BE HARDWORKING
10. HE SHOULD BE SYSTEMATIC
11. HE SHOULD BE METHODICAL
12. HE SHOULD HAVE THE CAPACITY TO HEAR THE ARGUMENTS OR VIEWS OF OTHER
13. IN THE WORD OF LINDLEY,AN AUDITOR MUST BE HONEST I.E HE MUST NOT CERTIFY WHAT HE DOES NOT BELIEVE TO BE TRUE AND MUST TAKE REASONABLE CARE AND SKILL BEFORE HE BELIEVES THAT WHAT HE CERTIFIES IS TRUE.
14. TECHNICAL COMPETENCE:

a)    AUDITING

b)    ACCOUNTING

c)    TAXATION

d)    INFORMATION TECHNOLOGY

e)    LAW

f)     ECONOMICS

g)    BUSINESS FINANCE

h)    BEHAVIORAL SCIENCES

i)      MATHEMATICS

Ø  OVERALL OBJECTIVES OF THE INDEPENDENT AUDITOR AND CONDUCT OF THE AUDIT IN ACCORDANCE WITH THE STANDARD OF AUDITING

• OBJECTIVE OF AUDIT OF FINANCIAL STATEMENTS:-THE AUDITOR IS REQUIRED TO OBTAIN REASONABLE ASSURANCE AS TO WHETHER THE FINANCIAL STATEMENTS ARE FREE FROM MATERIAL MISSTATMENTS RESULTING FROM FRAUD OR ERRORS
• REQUIRMENT AND RESPONSIBILITY OF THE AUDITOR:-

1. ETHICAL REQUIREMENTS: COMPLY THE CODE OF ETHICS ISSUED BY ICAI
2. PROFESSIONAL SKEPTICISM: SHOULD  BE VIGILANT AND ALERT
3. PROFESSIONAL JUDGMENT: ON THE BASIS OF DOCUMENTARY EVIDENCE
4. SUFFICIENT AUDIT EVIDENCE
5. COMPLIANCE OF NECESSARY STANDARD OF AUDITING
6. SCOPE OF THE AUDIT IS DETERMINED BY TERMS OF ENGAGEMENT,APPLICABLE LAWS
7. REASONABLE ASSURANCE