A vital part of auditing is that the auditors must
be independent from the management who are responsible for the accounts and the
owners receive them.
be independent from the management who are responsible for the accounts and the
owners receive them.
In the case of companies, they must not be
connected with either the directors or the shareholders. They must also be
independent of government agencies or other
connected with either the directors or the shareholders. They must also be
independent of government agencies or other
groups who have contact with the
business.
For these reasons auditors form themselves into
independent firms willing to perform audits for a fee for whoever is able and
willing to employ them. Some of these firms are very large with worldwide
connections and employing thousands of people. Others are very small with
sometimes only one or two principals and a very small number of staff.
independent firms willing to perform audits for a fee for whoever is able and
willing to employ them. Some of these firms are very large with worldwide
connections and employing thousands of people. Others are very small with
sometimes only one or two principals and a very small number of staff.
Auditors have to conduct their audit, not only
taking into account the relevant sections of the company’s act 2006, or any
appropriate legislation, but also as instructed by auditing standards,
guidelines and bulletins issued by, in the United Kingdom, the auditing
practice board.
taking into account the relevant sections of the company’s act 2006, or any
appropriate legislation, but also as instructed by auditing standards,
guidelines and bulletins issued by, in the United Kingdom, the auditing
practice board.