Back to: Auditing
Hello, Students
Today, we will focus on the main principles that guide auditing. These are the things that help auditors to do their job well and without bias. Make una ready?
Lesson Objectives:
By the end of today’s class, students should be able to:
Mention the key principles of auditing.
Explain each principle in their own words.
Understand why these principles are important for auditors.
Basic Principles of Auditing
Auditing must follow some basic rules or principles. These are like a guide that tells the auditor how to behave and do the job properly. If an auditor does not follow these principles, the audit may not be trusted or even accepted by law or the public.
Let us go through the main ones:
1. Integrity
Integrity means being honest and truthful. An auditor must not lie or hide anything. They must say exactly what they find, whether it is good or bad. Even if the result of the audit will cause trouble for the client, the auditor must still speak the truth.
2. Objectivity
Objectivity means not taking sides. The auditor must not allow friendship, money, pressure, or any personal feeling to affect their judgement. They must be neutral. This is why auditors should not audit a company where they have personal interests.
3. Confidentiality
Auditors see many private and sensitive details. They must not go around talking about what they see during an audit. They should only share information with the right people and keep everything confidential. Breaking confidentiality is very unprofessional.
4. Professional Competence
This means the auditor must have good knowledge and skills to do the job. They should also try to learn new things and keep improving. For example, if there is a new accounting standard, the auditor should learn it.
5. Professional Behaviour
An auditor must act well at all times. They must obey laws and avoid anything that can spoil their name or the image of their profession. This includes dressing properly, meeting deadlines, and talking respectfully.
6. Independence
This is a very important principle. It means the auditor must not be controlled or influenced by the company they are auditing. They must be free to speak their mind and give honest opinions without fear.
Example for Better Understanding:
If you are auditing your uncle’s company, and he tells you to overlook a mistake because you are family, what should you do?
Answer: As an auditor, you must be independent and objective. Even if the person is family, you must do your job honestly.
Summary of Lesson:
We have learnt that auditing is guided by key principles such as integrity, objectivity, confidentiality, competence, professional behaviour, and independence. These principles help the auditor to be trusted and respected. They also ensure that the audit is useful and truthful.
Evaluation:
Mention any four principles of auditing.
Why is independence important for an auditor?
What is integrity in auditing?
Should an auditor share audit details with outsiders? Why orwhy not?
What does objectivity mean in auditing?
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