In this article we will discuss about the statutory and general qualifications of an auditor.
Statutory or Professional Qualifications of an Auditor:
The Companies Act requires the annual accounts of every company registered under the Act to be audited by a qualified auditor, i.e., one who is a Chartered Accountant within the meaning of the Chartered Accountants Act with a few exceptions.
In order to be a Chartered Accountant a person is usually required to serve a period of article ship or audit clerkship under a practicing Chartered Accountant and to pass the Chartered Accountancy Examination as prescribed and conducted by the said Institute. An auditor must also possess a valid Certificate of Practice from the Institute. It is also necessary to have knowledge of relevant statutory rules, clarifications, modifications and circulars etc.
General Qualifications of an Auditor:
These are more important because although professional qualifications are not obligatory in cases other than a company, general qualifications as enumerated below must be possessed by auditors of all types of organisations and businesses.
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(a) Complete mastery of the subject of accountancy in all its aspects without which it is difficult to understand the nature of accounting entries and to check them properly.
(b) Thorough knowledge of commercial and industrial laws, because in many cases transactions and accounts are governed by law.
(c) Good idea about practical business methods and office procedure in order to understand clearly the nature of transactions.
(d) Knowledge of mechanical or computerised accounting, and labour- saving devices.
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(e) Vigilance and caution, perseverance and patience, diplomacy and tact.
(f) Strong character, personality and integrity, firmness and courage, honesty and ability to maintain secrecy.
(g) Thorough and methodical, prudent and practical and having strong common sense.
(h) Objective/unbiased approach.
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(i) High degree of competence.
(j) Courteous and dignified behaviour.
(k) Exercise of reasonable care and skill having regard to the merit of each case.
(l) Professional independence.