Right and Duties Of Auditor

The rights and duties of an auditor play a crucial role in ensuring the accuracy and transparency of financial statements. As a company auditor, it is the duty of an auditor to access the books of accounts and records of a company, in accordance with auditing standards and the Companies Act.

Rights and Duties of an Auditor

The auditor must prepare an audit report, which provides an independent assessment of the company’s financial position, including the balance sheet, profit and loss statement, and cash flow statement. Additionally, the auditor has the right to obtain information and explanation from the company, and the right to receive all necessary explanations for performing his duties.

 It is also the right of an auditor to report any matter to the central government, if necessary, and to report any loans and advances made by the company, ensuring that they are properly secured. Overall, the role of an auditor is to ensure that the company’s financial reporting is true and fair and to uphold the integrity of the audit process in accordance with the Companies Act 2013 and the guidelines set by the National Financial Reporting Authority.

The Role of an Auditor

An auditor is an individual typically appointed by a company to examine its financial statements. They can be classified into two main categories:

External Auditor: An independent entity engaged to review the organization’s financial statements and provide an opinion on their accuracy.

Internal Auditor: An employee of the company who ensures operational efficiency, compliance with laws, and that established policies and procedures are followed.

Rights of the Auditor

Auditors possess certain rights to enable them to perform their duties effectively.

Right to Access Books: Auditors have the right to access books, records, vouchers, and other documents of the company. They need these documents to get a true and fair view of the company’s financial standing.

Auditor Has a Right to Attend Meetings: The auditor can attend any general meeting of the company members and hear discussions related to their report.

Right to be Indemnified: Auditors have the right to be indemnified against any expenses they incur in defending themselves against lawsuits or allegations related to the work done in their auditing capacity.

Auditor Shall Sign: The auditor shall sign the audit report, indicating their responsibility and opinion on the company’s financial statements.

Duties of an Auditor

Duties of an auditor include but are not limited to:

Auditor is Responsible for Reporting: An auditor is responsible for preparing and presenting an audit report on the company’s financial statements. This report should give a clear true and fair view of the company’s financial health.

Verify Financial Transactions: An auditor reviews all financial transactions of the company to ensure they are legitimate and are represented accurately in the financial statements.

Ensure Compliance: The auditor checks if the financial statements of the company are prepared following the accounting and auditing standards laid down by the Companies Act. They also ensure that all financial statements are in line with the provisions of the Companies Act.

Detect Fraud: One of the primary duties of a company auditor is to detect and prevent any fraud or malpractice committed against the company. If any discrepancies are found, the auditor works in the best interests of the company to address them.

Auditor to Perform Diligently: It’s the duty of the auditor to perform their duties with relevant ease and due diligence. They should inspect all the books, records, and vouchers of the company.

Working Papers to the Company: An auditor should provide their working papers to the company auditor to aid in the latter’s tasks and for the continuity of the audit process.

Auditor’s Relationship with the Company

An auditor is crucial to maintaining transparency within the company. Whether they’re the first auditor or succeed a series of auditors, they must ensure they’re unbiased in their evaluations. The company auditor to aid the process should always cooperate with the incoming or existing auditor.

Every auditor should understand the nature of the company’s business. They should evaluate the risk factors and understand the internal controls of the company. This understanding will allow the auditor to comply with the expectations of the stakeholders and provide assurance from the auditor’s end.


The importance of an auditor in a company cannot be stressed enough. They provide an unbiased view of the financial statements, ensuring the management’s decisions are in the best interest of the company and its stakeholders. With their rights in place, they have all the necessary tools and access to perform their duties effectively. On the other hand, their duties ensure that every company remains compliant, transparent, and runs ethically. Whether it’s the rights or the duties, both play a pivotal role in shaping the auditor’s relationship with the company and their contribution to the business’s overall growth and reputation.

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