Auditing is a process in which an independent party examines any entity’s financial information. The purpose behind conducting such examinations is for the party to express their opinion of the information. There are several parties involved in any auditing process. These include the intended users, the responsible party, and the auditor.
Who is an Auditor?
An auditor is a party that examines a client’s financial statements with the objective of presenting their opinion. Auditors are financial professionals qualified to conduct an entity’s audit. Usually, they are a member or associate of an accounting body. Auditors evaluate the validity of an entity’s financial statements and the information provided within them.
In short, an auditor is a party that can render auditing services, whether internal or external. However, it is crucial for auditors to be independent in both cases. Even if they work for an employer, they must maintain their objectivity. There are several rules and regulations that regulate the work that auditors perform. These rules define their rights and their duties during the auditing process.
What Are the Rights of an Auditor?
Although auditors are independent professionals, they have some rights. If these rights are not upheld or met, auditors will not be able to perform their duties. Some of those rights include the following
Access to Records
The primary right that auditors have is the right to access the records. It includes both financial and non-financial information. Depending on the type of engagement and services provided, the information required may differ.
Nonetheless, auditors have the right to request any records or information without any restrictions. It includes any information that the client keeps related to the accounts, such as general ledgers, bills, invoices, etc. Similarly, auditors have the right to obtain information and explanations from employees or the management.
Access to Enquire Management and Personnel
Generally, auditors must be able to interact with the clients’ employees or management. While some clients may not provide unrestricted access, auditors must have the right to contact those involved in financial decisions. It also includes personnel who are not present at the client’s current location. Regardless of the employee’s location or position, auditors must be able to interact with them.
Right to Attend Meetings
Auditors also have the right to attend the client’s annual general meetings. On top of that, they must have the right to receive any notifications about such meetings. Auditors must not have any restrictions imposed by the client that prevents them from participating in these meetings.
Right to Provide Opinion
Auditors also have the right to express their opinion on the financial statements. This right comes from the fundamental reason for conducting audits. This right gives them permission to express their opinion based on their findings during their work. If the client doesn’t meet any of the above rights or restricts the auditor’s impudence, auditors have the right to resign as well.
What Are the Duties of an Auditor?
Auditors also have several duties that they must fulfill during their time serving as auditors. These duties may relate to on-field or off-field obligations. Some of these include the following.
Analyze Financial Statements (Subject Matter)
Primarily, it’s an auditor’s duty to perform the audit of a client’s financial statements in accordance with the relevant financial reporting framework. During this process, they must evaluate whether the client has prepared all the required financial statements with the given framework.
Provide Audit Report
On top of that, it is the auditor’s duty to provide an audit report based on their findings during their work. They must also consider the agreed timeline with the client. However, it is not mandatory for auditors to issue a report before a deadline. There are other issues that may also play a role in it, such as the audit quality and whether the auditor has completed their work.
Make Enquires
Auditors must also make proper enquiries during their audit work. This part constitutes their duty to collect audit evidence that is both sufficient and appropriate. For that, they must use the information provided by the client and request any information they deem necessary. Auditors must complete this process while complying with the auditing standards applicable to them. This obligation constitutes another duty for auditors.
Report Misstatements and Fraud
Auditors also have the duty to report any misstatements, errors, or frauds. They can do so through their report. The auditing standards also guide auditors on how to disclose such instances. However, once an auditor discovers such events, they must make proper investigations. After ensuring the existence of such events, they must report it.
Others
There are also several other duties that auditors must perform. For example, they must assist in group audits if required. On top of that, the jurisdiction where auditors work may also specify specific duties that auditors must perform. Some responsibilities may also relate to the fundamental or ethical standards for auditing. For example, one of the auditors’ duties includes ensuring they are always independent and objective of the client.
Conclusion
An auditor is a trained professional who conducts an entity’s audit. During this process, they examine their financial statements and form an opinion regarding them. During any audit assignment, auditors have some rights. If these rights are not met, auditors cannot perform their work. Similarly, auditors have some duties during audit engagements, as mentioned above.
