Please use this identifier to cite or link to this item: https://dr.ddn.upes.ac.in//xmlui/handle/123456789/1883
Title: Role of Audit to Protect the Investor's interest under Companies Act, 2013
Authors: Prasad, Radheshyam
Ahmed, Tabrez
Keywords: Auditing
Issue Date: Sep-2014
Citation: Emerging Researcher - Volume I, Issue III, July -September 2014
Abstract: Audit is a formal examination and verification of financial accounts and records of any organisation. It has become an essential requirement for good corporate governance as it plays a major role in ensuring transparency and accountability in the corporate financial administration, thus auditors are often referred to as gatekeepers. A company carries on business with capital provided by persons who are not in control of the use of the money supplied by them. They would, therefore, like to see their investments are safe, being used for intended purposes and the annual accounts of the company present a true and fair view of the state of affairs of the company. For this purpose, the accounts of the company must be checked and audited by a duly qualified and independent person who is neither employed in the company nor is in any way indebted or otherwise obliged to the company.1 The contract under which the work of a company’s auditor is with the company should be as a separate person. Like anyone who renders professional services for reward, a company’s auditor owes the company an implied contractual duty of care in and about the manner in which the audit is performed.2 The nature of an auditor’s duty of care in the performance of an audit was considered by Lopes LJ in Re Kingston Cotton Mill Co (No-2)3 which is relevant even today also- “It is the duty of an auditor to bring to bear on the work he has to perform that skill, care and caution which a reasonably competent, careful and cautious would use. What is reasonable skill, care and caution must depend on the particular circumstances of each case. An auditor is not bound to be a detective, or as was said, to approach his work with suspicion or with a foregone conclusion that there is something wrong. He is a watchdog, but not a bloodhound……an auditor does not guarantee the discovery of all fraud.”4
URI: http://hdl.handle.net/123456789/1883
ISSN: 2348-5590
Appears in Collections:Published papers

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