An auditor checks a company’s financial records to ensure they are accurate and follow laws and rules. The key duties of an auditor are:
1. Check Financial Statements
Review the company’s financial reports to ensure they are correct and follow accounting standards.
2. Follow Legal Rules
Ensure that the company is following all financial laws and regulations.
3. Find Errors and Frauds
Look for mistakes, fraud, or any irregularities in the financial records.
4. Review Internal Controls
Check the company’s internal systems to ensure they are working to prevent errors or fraud.
5. Give an Independent Opinion
Provide an honest and unbiased opinion on whether the financial records show a true picture of the company’s finances.
6. Prepare an Audit Report
Write a report that explains the findings of the audit and submit it to the company’s shareholders or concerned parties.
7. Keep Information Private
Maintain confidentiality of the information learned during the audit and not use it for personal benefit.
8. Suggest Improvements
Advise the management on how to improve financial practices or processes based on the audit findings.
Conditions for Removal of an Auditor
An auditor can be removed under certain conditions. These include:
1. By Decision of Shareholders
Shareholders can vote in a meeting to remove the auditor by passing a special resolution.
2. Failure to Perform
If the auditor is not doing their job properly or neglecting their duties.
3. Conflict of Interest
If the auditor has personal or financial ties to the company, which may affect their independence.
4. Unethical Behavior
If the auditor is involved in fraud or violates professional or legal standards.
5. Mutual Agreement
Both the company and the auditor can agree to end the contract before the term ends.
6. Government or Court Order
A court or government body may direct the company to remove the auditor if serious problems are found.
An auditor is responsible for ensuring that a company’s financial records are accurate and fair. They help maintain trust by detecting errors and ensuring compliance with rules. However, if an auditor fails to do their job properly or acts unethically, they can be removed through a proper process.