Auditor Is A Watchful Custodian Of A Business Entity

The term 'Audit' is derived from the term 'Audition' which means 'to hear'

. In the olden era, the Kings used to listen to their accountants recounting the accounts details verbally. However, as the complications in the accounting tasks developed, it called for comprehensive examination of the accounts for faults and reporting of the conclusions in a written form so that it can be of use to the top management, shareholders, investors, Government and several other parties. This practice is known as Auditing or Audit. Audit can be described as the process of thoroughly assessing the financial information of an enterprise, regardless of its nature, size or legal form, independently.

In the area of financial accountancy, an audit is characterized by the independent review of the fair dealing by which an organization's financial statements are devised and submitted to its authorities. This job is primarily executed by the trained, experienced and independent persons, known as auditors. Auditors are overall very educated with every facet of auditing and they sequentially, prepare a report known as auditors report. Basically, there are two kinds of auditors-external auditors and internal auditors. External Auditors are hired from outside the business to carry out the process of evaluation of financial statements of their clients. Internal Auditors are employees of the company who evaluate the internal control mandatory for the company. They give an account of this directly to Board of Directors. They are in charge to carry out a scrutiny associated to the frauds that may have been committed in a company.

Internal auditors assist their company to control risks. They give advice to top management on significant matters for instance, the extent of risk and how can they be managed. They deal with problems that are essentially imperative for the endurance and success of current organizations. They are concerned for the wider aspects like the businesss reputation, development, how it influences the surroundings and the way manages its human resources. The external auditors plan and perform the audits to make certain that financial statements are prepared as per the legal requirements and are accurate and trustworthy. The external auditors give vital comments on the efficacy of the internal control system.

In order to undertake the work of auditors London, one needs to obtain certification from any of the recognized auditing supervisory body (RSB) -ACCA, AIA, ICAEW, ICAI, ICAS and CIPFA. After registering with any of the RSBs, the person is required to qualify all the examinations. In addition, he or she has to take supervisory training at the office of audit services for the required number of years varying for each RSB. After following this process, audit recognition would be given to the person.

by: dasuk

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