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Q.1Criticallyevaluate the qualities of an Auditor in the wake of recent scams.Answer:
An auditor renders a professional service to his client. He should not only possess theprescribedstatutory qualifications but also certain personal qualities. Some of thosepersonal qualities are mentionedbelow:
According to Spicer and Pegler, ”the auditor should have afull shareof that mostvaluable commodity-commonsense.” This is necessary todistinguish betweenimportant and not soimportant information.
Expression of opinion is a prime duty of an auditor. Aninfluenced andbiased personcannot form an independentopinion. Hence, independence in true sense is an utmost quality of anauditor.
3.Honesty and Integrity:
Like any other professional viz. Doctors, Lawyers etc. auditorshould possessa high moral character. In a way, he is a public servant. He mustnot knowingly, misinterpret any factor sign any document under undue pressure.
Independence of an auditor depends on his ability to act withobjectivity. Forexample,the auditor of XYZ Company believes that closing stock has notbeen properlyvalued but accepts acertificate from the management as to its valuation. Inthis case, the auditors
He should be able to communicate effectively, both orally andin writing.Particularly in the matter of report writing, he should be able to conveyhis messageclearly andunambiguously.
He should be firm, yet diplomatic with his client and staff.He should be tactful enoughto obtain necessary written as well as oral evidencefrom hisclient, so that he can form a reasonableopinion.
7.Awareness of latest developments:
An auditor should keep his knowledge upto daterelated tohisaudit worklikes changes in laws,changes in professionalstandards, latestdevelopment in technicalguidelines etc.
Q.2What is social audit? Is social audit taken seriously by the corporate world?Giveexamples ofcorporateundertaking social audit.Answer:
The social audit isalso called social responsibility audit. A businessorganization existsin society.Hence, it owes certain responsibilities toward society at large. As Lord Denninghas observed:The directors of a great company should owe a duty to those who are employed by thecompany to seethat their conditions of service are proper.