What are Rights of An Auditor? The auditor cannot do anything directly for prevention of errors and frauds. He can advise his client about ways and means to prevent errors and frauds in future. The client must act upon the advice of auditor for the accuracy of accounts.
The auditor can check accounts at certain intervals. The employees of accounting department must be held responsible for errors and frauds. Frequent visits of auditor cam make the employees alert to maintain proper books of accounts.
They try to keep an accurate record of business transactions. It is due to moral pressure put by the auditor on employees of the client. The auditor must protect the property of the business. The shareholders appoint an auditor for accountability of management. He is an agent of the shareholders.
Justice Lopes gave the remarks that ‘auditor is a watchdog and not a bloodhound’ in case of Kingston Cotton Mills in 1896. In fact, the manager had manipulated the accounts of the company for a number of years. The stock-in-trade was overvalued to increase the rate of profit. The officers prepared the stock sheets. The manager of the company signed these stock sheets.
Also Read: Duties of An Auditor
The auditor relied on such stock sheets. The auditor argued that there was nothing to arouse his suspicions. He accepted the stock sheets duly attested by officers. The decision indicates duties of auditor relating to detection and prevention of errors and frauds. Let’s discuss rights of an auditor as below:
What are the Rights of an Auditor
The rights of an auditor have discussed under:
Access to Books
The auditor has a right of access to the books of accounts. He can see the books at head office or at branches. There is no need to give any notices for inspection of accounts books.
Call for Information
The auditor has right to call for from management. The entries in accounts books may not be clear vouchers may be missing or alteration may be made. The auditor calls for information to test the truth.
Branch Inspection
The auditor can visit branches for inspection In case of inland branches auditor can examine working of branches and accounting records. He can rely on information supplied by other auditor in case of overseas branches.
Branch Audit
The auditor can audit the accounts of inland and overseas branches. Management may appoint separate auditor for branches therefore separate report is submitted to company.
Receive Notice
The auditor can receive notice of meeting of a company. The notice may be received to this office during working hours. He can go through the agenda stated in the notice.
Attend Meetings
The auditor can attend meeting of the company. Management calls an annual general meeting as per lawn during meeting there may be a discussion about business accounts. The auditor has right to make a clarification.
Speak at Meeting
The auditor can speak at meeting of company to explain matters relating to business accounts. The actual figures are given to shareholders to clear their doubts.
Remain Present
The auditor remains present at company meeting. The business accounts may be presented for approval by shareholders. The auditor must be present personally to safeguard his rights.
Receive Remuneration
The auditor receives remuneration for work done under an agreement. The management can fix remuneration according to nature and volume of work. The amount of fee is paid in cash as per law.
Seek Opinion
The auditor can seek opinion from other persons. He can consult matters with experts in the field. The technical services are available in the market. The auditor can get help from experts to understand business matters.
Make Corrections
The auditor can make corrections about written or spoken matters. He can issue revised statement if there is any written mistake. The spoken matter may be corrected by providing true information to shareholders.
Make Representation
The’ auditor can make representation in meeting. He can defend himself when he is asked to leave office. He has right to complete his tenure of office. He auditor can plead his case when any change is made in terms of the contract.
