Define: Auditor

An auditor is a professional who is responsible for examining and evaluating financial records, statements, and other relevant documents of an organisation to ensure accuracy, compliance with laws and regulations, and adherence to generally accepted accounting principles. The auditor’s primary objective is to provide an independent and unbiased opinion on the financial health and performance of the entity being audited.

Auditors play a crucial role in maintaining transparency and accountability in financial reporting. They are typically engaged by the organisation’s management or appointed by shareholders to conduct an audit. During the audit process, auditors gather evidence, perform tests, and analyse financial data to form an opinion on the fairness and reliability of the financial statements.

The auditor’s opinion is expressed in an audit report, which outlines the scope of the audit, the procedures performed, and the findings. The report may include a statement on whether the financial statements present a true and fair view of the organisation’s financial position and performance. If any material misstatements or non-compliance with accounting standards are identified, the auditor may issue a qualified or adverse opinion, indicating that the financial statements are not reliable.

Auditors are bound by professional standards and ethical guidelines, such as independence, objectivity, and confidentiality. They are expected to exercise professional judgement, maintain professional skepticism, and communicate any significant findings or concerns to the organisation’s management or those charged with governance.

In addition to financial audits, auditors may also perform other types of audits, such as operational audits, compliance audits, or internal audits. These audits focus on evaluating the effectiveness of internal controls, identifying operational inefficiencies, or ensuring compliance with laws and regulations.

Overall, auditors play a critical role in ensuring the integrity and reliability of financial information, which is essential for making informed decisions by stakeholders, investors, and regulatory authorities.

This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.

This glossary post was last updated: 29th March 2024.