Unless an auditor is able to discover all frauds and errors, he has not performed its main fuction.
Is this true?? Pls explain..
Thank you
20 Replies
Sunshine
(Helping All)
(10575 Points)
Replied 03 December 2010
of course not...its not auditors duty to detect errors and frauds.....his duty is to express an opinion on whether the financial statements express true and fair view of financial financial position and all statutory disclosures are made.....
CA Dauzi Pathan Imran Khan
(Chartered Accountant in Practise)
(1678 Points)
Replied 03 December 2010
Not all true...
But an auditor has to follow Audit procedures to ensure that Finanacial statements depicts the fair view and make a complaince with the relevant statutes.
Drilling through the books of accounts and Accounting statements for sake of discovering frauds and errors is part and parcel of Auditor's duties.
According to Lord Lindley L.J: Auditor's business is to ascertain and state true financial position of the company at the time of audit and his duty is confined to that.
Refer to SA-240,Responsibility of Auditor to consider Fraud and Error in an audit of Finanacial Statements.
Sunshine
(Helping All)
(10575 Points)
Replied 03 December 2010
yeah....its not correct to say that auditor has nothing to do with detection of errors and frauds..but its not his main function or duty....refer SA 240...and SA 200A
Ankur Garg
(Company Secretary and Compliance Officer)
(114773 Points)
Replied 03 December 2010
| Originally posted by : Lakshmi | ||
 |
Unless an auditor is able to discover all frauds and errors, he has not performed its main fuction. Is this true?? Pls explain.. Thank you |
 |
No it is not true...
Here the word "All frauds is crucial"...It is not possible for auditor to check all fraudes and errors...and accordingly he can not be held responsible if he missed any fraud during his checking bcoz some frauds are planned very claverly. But he must be able to prove that he tried his best to locate the error. In other words he should not be careless in his approach.
But he should be very careful during his checking. For an apprent error auditor may be held liable and guilty of negligence.
Devendra
(Chartered Accountant)
(4775 Points)
Replied 03 December 2010
Dear Lakshmi,
Auditor's primary responsibility is to express a true and fair view on the financial statements of the state of affairs of the business. He examines and verifies the correctness of the financial statements prepared by the management and comments on the same. Auditor is specifically not appointed to detect errors and frauds in the organisation, but if he comes across any type of error or fraud, then he can go deep into the problem and make sure it is solved and reports the same to the higher management. Thus your statement is false.
Regards,
Devendra P Kulkarni
CA SANJAY TALWAR
(Job)
(222 Points)
Replied 03 December 2010
dear lakshmi,
auditor's primary responsibility to express their opinion on the organisation financial statement... not to deduct the fraud and errors........
Santhosh Poojary
(SIEMPRE AHÍ PARA TI)
(15607 Points)
Replied 03 December 2010
Auditor's primary responsibility is to express a true and fair view on the financial statements of the state of affairs of the business.
Auditor is specifically not appointed to detect errors and frauds in the organisation, but if he comes across any type of error or fraud, then he can go deep into the problem and make sure it is solved and reports the same to the higher management.
Mayur Arora
(CA Final)
(295 Points)
Replied 03 December 2010
It is not the auditor's duty to detect all frauds & errors, he is liable to give only an opinion on the financial statements & notes to accounts. If any frauds & errors are discovered subsequently, then he is not liable provided he has adopted adequate auditing procedures.
Elton Sukumar M
(Certified Accounting Technician)
(734 Points)
Replied 03 December 2010
God should come down from heaven to find out all fraud and error, human being cannot find any thing inspite of his intelligence and training
(Guest)
| Originally posted by : P IMRAN KHAN | ||
|
|
Not all true... But an auditor has to follow Audit procedures to ensure that Finanacial statements depicts the fair view and make a complaince with the relevant statutes. Drilling through the books of accounts and Accounting statements for sake of discovering frauds and errors is part and parcel of Auditor's duties. According to Lord Lindley L.J: Auditor's business is to ascertain and state true financial position of the company at the time of audit and his duty is confined to that. Refer to SA-240,Responsibility of Auditor to consider Fraud and Error in an audit of Finanacial Statements. |
|
Shila Rani
(student)
(106 Points)
Replied 03 December 2010
| Originally posted by : Sneha..sunshine.. | ||
|
|
of course not...its not auditors duty to detect errors and frauds.....his duty is to express an opinion on whether the financial statements express true and fair view of financial financial position and all statutory disclosures are made..... |
|
CA Deepesh Ruhela
(Keen to Learn)
(3271 Points)
Replied 03 December 2010
| Originally posted by : P IMRAN KHAN | ||
 |
Not all true... But an auditor has to follow Audit procedures to ensure that Finanacial statements depicts the fair view and make a complaince with the relevant statutes. Drilling through the books of accounts and Accounting statements for sake of discovering frauds and errors is part and parcel of Auditor's duties. According to Lord Lindley L.J: Auditor's business is to ascertain and state true financial position of the company at the time of audit and his duty is confined to that. Refer to SA-240,Responsibility of Auditor to consider Fraud and Error in an audit of Finanacial Statements. |
 |
Recent Topics
- Softex For freelancer ?
- GST ON REIUMBURSEMENT ENTRY ON GST PORTAL
- Missing invoice in gst
- GST on consultancy
- Linking adhaar to UAN without employer
- WHETHER ITC REVERSAL TH. GSTR 3B OR DRC03
- Advance Tax For Freelancers
- Is fvu 8.8 version available ?
- Interest and penalty on advance tax shortfall
- Joint Account with 3 legal heirs.......
Related Threads
CAclubindia
