The duties, detections and preventions of an auditor:
Auditor’s Duty:
ADVERTISEMENTS:
The duty of an auditor is quite significant in relation to the detection and prevention of errors and fraud. He knows full well that he has to detect such acts of errors and fraud on the one side and also to prevent them from occurring in future on the other.
Really, it is difficult for him to do so since fraud is usually committed by the officers who are presumed to be honest, sincere and responsible.
Image Source: i.ytimg.com
Detection:
It is true that the auditor should exercise considerable care and skill and only then he can detect errors and fraud. He can be successful in his task if he carries routine checking and vouching most carefully and checks thoroughly books of accounts, ledger accounts and vouchers. Thus, his duty is mainly confined to making intelligent and careful enquiry.
ADVERTISEMENTS:
In doing so, if he is not successful but feels that he has exercised a great degree of skill, care and tact, his job is over. However, he will decide himself the degree and level of the scrutiny.
If to the best of his knowledge, care and skill, he certifies the accounts as correct, he cannot be held responsible for an error or fraud which is still there in the accounts.
Prevention:
So far as the prevention of errors and fraud is concerned, he cannot do anything concrete directly. All that he can do is to advise his client and tell him the way to prevent their future occurrence if he is asked for that.
ADVERTISEMENTS:
His job is simply to give advice but it is the proprietor who is responsible for getting things done. It is certain that if his advice is taken properly in the right spirit, chances of errors and fraud can be reduced to the minimum.
Then, the visits made by the auditor to check accounts serve also as a considerable influence on those employees responsible for maintenance of accounts which are to be audited.
The persons responsible for the maintenance of accounts know well that the books prepared by them would be subjected to a close scrutiny by the auditor and if some errors and fraud are found therein, they will be held responsible for such acts of gross negligence and bad name.
Hence, under this fear, they always try to be on their guard. This is a sort of moral influence exercised by the auditor which helps a lot in the prevention of further occurrence of errors and fraud.