Role Of Auditor: Balancing Audit Procedures And Professional Skepticism

CA Amrita Chattopadhyay | Last updated: 01 August 2023

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Quick Summary

Auditors are independent professionals who examine an organisation's financial records to ensure reliability and accuracy for stakeholders. While not primarily tasked with finding fraud, their responsibility lies in diligently following established audit procedures and maintaining a mindset of professional skepticism. This involves a questioning attitude and critical evaluation of evidence to identify errors, misstatements, or potential irregularities, thereby strengthening corporate governance and trust in the financial ecosystem.

Recently, Indias accounting watchdog National Financial Reporting Authoritys (NFRA) chairperson Ajay Bhushan Pandey at ASSOCHAMs third International Conference on Financial Reporting and Control stated that. ...it is immaterial whether you are expected to find fraud or not, but what is material i

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FAQ :

Auditors are independent professionals responsible for examining an organisation's financial records, statements, and transactions to provide assurance to stakeholders that the financial information presented is reliable and accurate.

No, auditors are not expected to uncover every instance of fraud. Their primary responsibility is to follow due processes and audit procedures.

Audit procedures are a series of well-defined steps and methodologies designed to assess the financial health of an organisation, including assessing internal controls, performing substantive tests, and verifying financial data.

Professional skepticism is a mindset that auditors must maintain, involving a questioning attitude and critical evaluation of the evidence gathered during the audit, remaining cautious and alert to indicators of possible fraud or material misstatements.

Auditors are obligated to report any suspicious findings or red flags discovered during the audit process, such as unusual transactions or inconsistencies.