Overview:

The auditor is the one that reviews and audits the entity’s financial statements based on the scope of the audit engagement. It can be the financial statements auditing, financial statements reviewing, or other assurance services. Both auditor and entity’s management as well as the board of directors have their own rights and duties.

Role and responsibility, and rights and duties of auditors are generally prescribed in audit standard and specifically, vary based on the law that audit firm and auditee operating in.

Auditors’ rights and duties
Auditors’ rights and duties

The following are the general right and duties of auditors specifically to the audit of financial statements:

Auditors’ Rights:

  • Assess the records, including the right to access to all financial and non-financial information for the auditing period as well as related period—those records including management account, financial reporting, and accounting system. Supporting documents for expenses and revenues might be requested by auditors for their understanding and verification.
  • Access to certain information and explanation from management for certain matters may require and request by the auditor. They should have the right to access these things. For example, during the audit period, auditors review the contract made between the entity and customers. Auditors may ask management to explain the key term in the contracts or obtain certain information in the contracts.
  • Annual General Meeting is an important meeting that occurred once a year, and the auditor should have the right to receive the notification about when will the meeting will happen and the right to attend the meeting.
  • The right to obtain an understanding of the nature of the transaction or event that happened or records in the entity’s financial statements.
  • The right to resign from the entity if they believe that their independence is being impaired.
  • The right to express the opinion based on the fact that they have found during their audit. For example, they have the right to express their opinion that the financial statements are true and fair view based on the fact that they found no material misstatements.
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Auditors’ Duties:

  • Perform an audit in accordance with International Standard on Auditing. The auditor should review and assess whether entity financial statements including balance sheet, income statement, statements of change in equity, statements of cash flow, and noted to financial statements are properly prepared in accordance with accounting standards and framework or not. The result of the examination should clearly state in its report.
  • The auditor should consider releasing the report based on the agreed timeline. However, the auditor should consider whether the agreed timeline could affect the quality of the audit and audit report or not.
  • The auditor should also consider assessing whether the entity’s financial statements have followed all applicable legislation or not. If not, the auditor should follow the guidance from ISA that applicable to this case.
  • Auditor also has the duty to stay independent from the entity that they are auditing to avoid any kind of conflict that could be impaired their independence.
  • The right to terminate auditors if they found that the auditor is not following the code of ethics and as well as law and regulation.

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