Roles of the auditor, Auditing

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What is the role of the auditor, and what are the key duties the auditor must carry out?

Role of the Auditor

In modern commercial environmental it is desirable that businesses which are operate as companies with limited liability (usually operated by hired management) should produce accounts which will indicate how successfully they are performing. But owners of business require something more than the accounts because the managers responsible for preparing their may, either unintentionally or by deliberate manipulations, produce accounts which are misleading. An independent and examination of the accounts is needed so that owners of the business can asses how well management have discharged their stewardship.

The role of the auditors today has parallels with earlier forms of auditing the need for independent auditor was apparent when business develop in which there was a division of interests between those who carried out the day today management of undertaking and those who provided necessary finance but did not participate in management. The auditor can be seen mediators between such parties who have potentially conflicting interest. The work of auditors today is regulated mainly from two sources

1- Stature  of which co ordinance is very important

2- Profession of pronouncements on Auditing

Profession of pronouncements includes the rules of professional conduct issued by professional ladies to which auditors belong.

Kingston Cotton Mills Co. Ltd. 

In this case auditors were not held liable for negligence. It was held that it is not the duty of auditors to take stock, if they accept certificate in the absence of any suspicion, he has carried out reasonable care and skill.

Capro Industries.

In capro case the court pronounced the judgment that the auditor is only liable to present, not prospective investor, but according to latest auditing standards auditor is also liable to third party.


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