Some companies are required to appoint an auditor and have their accounts audited. It is the job of the auditor to report to the shareholders of the company as to whether the accounts have been properly prepared in accordance with the Companies Act and relevant accounting standards have been applied. The auditors must also report as to whether the accounts give a true and fair view of the state of the company’s affairs.
In order for the auditors to form their views and conclusions of the state of the company’s affairs they will carry out an examination of the accounting records on a test basis to ensure that the accounts are not materially misstated (incorrect). The auditors will also read the company’s policy for consistency with their knowledge of the company.
This does not mean that the auditors will check every transaction or that the accounts have to be 100 percent accurate; just that anyone looking at the accounts will be able to obtain a fair view of the state of the company’s affairs and will not be misled if the rely upon the figures.
Very often, particularly with smaller companies, the auditor will also act as accountant to the company and they will prepare the accounts and deal with the company taxation matters.
Canterbury Accountancy - Helping businesses understand the role of auditors to your company.
