Excellent Defination and presentation by Respected CA Shailesh HaribhaktiChairman BDO Hari Bhagti Sir,
Role of Auditors
The role of auditors should be understood largely in the context of the aspirations of shareholders, customers, employees, governments and regulators who have differentiated economic interests in an organization and not the same level of access as the auditors are entitled under the law to have. The aspirations of these economic interests is comprehensive independence of the auditors, a protection from material fraud and a environment that can be described as internally well controlled. With the wide spread implementation of ERP solutions the mechanics of accounting are no longer that relevant. It is the positioning of the effect of economic transactions that is most critical.
In the above context, the green paper issued by the European community and the recent actions of the financial services commission in England are extremely relevant. The world is on the cusp of a redefinition of the Role and Expectations of Auditors. The demand will be for far greater independence, competence, judgment and a documented process which can stand up to global scrutiny. My take is that the quality of auditing will have to improve very significantly over the next few years. The value to be delivered will increase significantly and the necessary costs of such quality and value will have to be met.