An Audit Of An Auditor

2930 WordsDec 3, 201412 Pages
Introduction The business environment has become more complex; therefore, the demands for professional audit have been increased in order to provide reasonable assurance to users of financial statements. An auditor is individual qualified to conduct audits either internally or externally. An internal auditor is an individual whose primary job function is to audit his or her own company, while an external auditor is an individual from outside the company, who usually is employed by an auditing firm who takes the audits several clients. The external auditors plays an important role in the society, one of the important role of an external auditor is to “perform the audit to obtain reasonable assurance about whether the entity maintained…show more content…
Financial statements are used by company owners to evaluate the how the company is doing, also by investors for making decisions about when to invest or when to sell their shares, by lenders or banks in order to make decisions about credit worthiness of the company. Financial statements can be use effectively when the user understands the roles of the financial statements preparer and the auditors. A company’s financial statements represent the management. When using management’s statements, a user need to understand that the preparation of the financial statements requires management to make substantial accounting estimates and decisions, also in order to choose from among several alternative accounting principles and methods that are most appropriate within the guidelines of generally accepted accounting standards (GAAP). Role of an auditor The auditor’s role is different from the role of the management; the auditor is responsible for expressing an opinion on whether management has fairly presented the information in the financial statements. During an audit, an independent qualified auditor evaluates the financial statements. During the audit, the auditor collects evidence to obtain reasonable assurance that the amounts and disclosures in the financial statements are free of material misstatement. An auditor is also responsible to check whether audit evidence increases doubt about the ability of the client to continue as a going concern
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