An auditor is a person who is authorized to assess the financial statements of organizations and ensure that the organizations are run effectively. The major role of an auditor is to track an organization’s financial records (Yassin, 2020).
After tracking the financial records, the auditor verifies that the organization’s funds are properly accounted for. The auditor ensures that the organizations comply with tax laws and protects the organization from fraud by identifying discrepancies in accounting methods (Yassin, 2020).
For sole proprietorship firms or partnerships, the law does not prescribe an auditor’s qualifications. However, the law prescribes that the auditor should be registered as a chartered accountant for joint-stock companies, as stated in the chartered accountant act, 1949. This paper describes the statutory qualifications and professional qualities of an auditor.
An auditor must pass an examination for chartered accountants associations that is globally recognized. For example, the Institute of Chartered Accountants of India (ICAI) requires that an auditor must pass the exam conducted by the same Institute or other international auditing bodies such as I.I.A. and ISACA.
However, for a qualified auditor to be entitled to practice, they must be certified to practice as auditors by the ICAI council at a prescribed annual fee (Mohan & Raj, 2020).
Usually, classified its members into two groups which include the Fellows and the Associates to the institute. Auditors are considered associate members of ICAI if their names are listed members register.
The ICAI maintains the members’ register. Once their names are included in the ICAI register, the auditor is entitled to use A.C.A. letters after their name. The associate auditors continue to practice as qualified auditors in India for at least five years working under any registered body of auditing (Mohan & Raj, 2020).
The associate body must also have been a member of ICAI for five years. However, the associate body should possess auditing qualifications as required by the ICAI auditing council.
An auditor can also be enrolled as a Fellow of the ICAI institute (Mohan & Raj, 2020). When the auditors enroll as Fellow, the institute grants them the permission to include letters F.C.A. at the end of their name.
- A qualified auditor must possess a bachelor’s degree in accounting. However, some institutions prefer having auditing candidates with a master’s degree in accounting.
- The auditing candidates should have a relevant certificate in computer accounting software course.
Professional Qualities and Personal Qualifications
A qualified auditor should have many professional qualities that are varied in nature. The qualities are meant to help the auditor become more successful in auditing field. Some of these professional qualities include the following:
- For someone to qualify as an auditor, they must possess enough knowledge of the principles, theories, and practices of auditing and accounting. Therefore, they must be familiar with all aspects of accounting and accounting systems. For an auditor to be professionally qualified, they must be well-versed with all accounting branches (Mohan & Raj, 2020). They should have an understanding of the current changes in the accounting career.
- The auditor should be well versed with legal frameworks governing business entities (Yassin, 2020). This means that the auditor should clearly understand the legal framework described under the Companies Act, Partnership Act, the Indian Contract Act, and the Foreign Exchange Management Act.
- Auditors must have full knowledge of the auditing techniques. This involves understanding current changes in the auditing principles and practices.
- Auditors must be well versed with computerized accounting techniques (Yassin, 2020). He or she must possess enough knowledge and skills on the automatic machine devices used in offices for accounting purposes.
- An auditor should fully understand business laws. However, a qualified auditor must also have full knowledge of different legal provisions in relation to gift tax, V.A.T., and income tax provisions.
- The auditor should have enough knowledge of the economics laws and economics principles (Yassin, 2020). This is very important because businesses work within specific economic laws. Businesses also operate with a social environment, and the business entity highly feels its influence.
- The auditor must be well versed with statistics and mathematics concepts (Yassin, 2020). Concepts of statistics and mathematics help the auditor to solve more complicated problems they may come across in auditing.
- An auditor must have a full understanding of the structures of business organizations, industrial management skills, and financial administration skills.
Qualities of an Auditor
Personal qualities are very important for a successful auditor. A qualified auditor should have the following personal qualities.
- Honesty: A qualified auditor should have an honesty trait. Honesty is a virtual that would allow an auditor to successfully carry out his duties and maintain good moral standards for the auditing profession.
- Tactful: This is a personal trait that enables the auditor to deal with the clients carefully.
- Hard work: Auditors must be a person who can work willingly and has a painstaking attitude.
- Impartial: An auditor should have an independent mind such that he cannot be influenced to change his audit opinions.
- The auditor should always be curious: This means that the auditor should not be suspicious; rather, he should always clarify unclear facts.
- Secretive: The auditor should keep the secret when carrying out his tasks. This would help him to make independent opinions based on his audit findings.
The statutory and professional qualifications of an auditor are essential in his auditing career. With such qualifications, the auditor can easily observe certain codes of conduct. Through personal qualifications, an auditor can easily understand his professional ethics.
The professional qualification helps the auditor to gain public confidence and trust. In today’s world, most business activities are done online, and accounts are maintained on computer software.
Therefore, no primary data should be used when recording business transactions. This is the reason that auditors need to be well versed with computerized accounting and the EDP system.
Auditors also E-governance and E-commerce skills and knowledge to face challenges of the digital business era. It is therefore important for the auditor to be diversified and acquire skills from different careers. Career diversification improves their competence to carry out auditing tasks more effectively.