Page 29 - CA Inter Audit PARAM

CA Ravi Taori
Auditor & Related Concepts (Personal qualities of Old Course --
QNO-- Auditor) (P16M/N16M/N17R/N18M/M21M/M19R/N21M)
COA.27
Bhaskar CNO C1OC.120
Lord Justice Lindley in the course of the judgment in the famous London & General Bank case had
succinctly summed up the overall view of what an auditor should be as regards the personal qualities.
Explain stating also the qualities of Auditor.
OR
“The auditor should possess specific knowledge of accountancy, auditing, taxation, etc. which are
acquired by him during the course of his theoretical education”. Explain stating briefly the qualities of
Auditors
OR
Apart from the knowledge acquired by the auditor in the formal manner, the auditor should also possess
certain personal qualities. Explain stating briefly the qualities of Auditors.
OR
All those personal qualities required to make a good person contribute to the making of a good auditor.
Explain stating the qualities of an Auditor.
OR
State briefly the qualities of an Auditor.
Answer ➢ Professional /Technical Qualities
• Knowledge about the business practices and transactions.
• Knowledge of the required acts:
• He should have an expert knowledge of various laws which are related to his
professional duties. He can’t be an expert of all laws. However, he should have
adequate knowledge of the laws relating to business, banking, companies, tax
etc.
• Expert knowledge in accounting:
• He should be an expert in understanding various accounting systems.
• He should have a good knowledge on treatment of various events / transactions
and its effect on various parts of the financial statements.
• Expert knowledge in auditing:
• This is the most important quality. Unless an auditor thoroughly knows the
techniques to be adopted in an audit, he cannot discharge his duties efficiently.
• Continuing awareness of latest developments:
• Several developments affect the work of the auditor. For example, the recent
growth in the use of computers for maintaining accounting records had a
significant effect on auditing techniques. Another example is, any changes in law
may affect the auditor’s duties and responsibilities.
➢ Personal Qualities
(Ethical Requirements +Independence)
• Ethics:
He must sincerely follow the professional ethics framed by ICAI.
• Integrity:
It refers to the honesty of an auditor. He should not issue audit report containing untrue
statements.
• Objectivity:
It refers to unbiased, being unaffected by personal feelings or prejudices.
• Independence in decision making:
He should be independent in decision making with regard to audit matters i.e. the audit
decisions should be taken without giving importance to his personal wishes.
• Confidentiality:
The nature of audit work is confidential. He should not reveal anything about his client to
others without the consent of the client.

Approach
• Analytical in approach:
He should be highly analytical in approach. If the facts placed before him are not properly
analysed, the conclusions reached by him will not be proper.
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