Updated at 04/07/2022 - 05:49 pm
Auditors - people who clearly understand the financial and business situation of the business #
From the late 13th century, early 14th century, the profession of audit appeared in England. Now that they (auditors) work for the shop owners, their job is to check the accuracy of their revenues and expenditures, as well as the annual profits earned by the stores.
This helps owners avoid the loss of profit sources and check the accuracy of the profits that stores bring back after a certain period of business. Thanks to the numbers given by the auditors, the merchant owners will adjust their business plans.
The development of the audit industry has always followed the development of the economy, especially in the first industrial revolution, when the operating model of many private companies in Europe is still incomplete. . The demand for auditing is increasing, so auditing gradually becomes a profession, not just a part of a bank, an investment fund or an employee of a big boss.
Gradually, independent audit firms providing audit services were born.
Auditor - who gave comments on the truthfulness and reasonableness of the financial statements #
Auditing need comes from the business owners (shareholders) because they cannot and need not self-check all the financial information of the business that is responsible for the preparation and reporting of the business director. Therefore, they have appointed auditors - who are qualified professionally, independently, and objectively - to replace them independently to check and report in their opinion on the truthfulness and reasonableness of financial statements.
Along with the development and diversity of the economy, financial information is used for different purposes to different audiences. However, all users of audit results need assurance that the financial information they have been provided is truthful and reasonable. Thus, the auditor is the person who must provide an independent opinion based on the audit results about the truthfulness and reasonableness of the financial information prepared and presented in the financial statements.
Special standards must be met in order to do the job #
An independent audit is performed by a professional auditor. This job does not generate additional information about the financial statements, it only increases the reliability of the financial statements. In order to practice in auditing, auditors need to absolutely ensure the following special requirements.
Requirements for independence
This requirement is considered as a necessary condition to achieve the objectives of the audit, independence is the basic principle of practice of the auditor. Audit results will be of no value when users of audit results believe that an audit lacks independence, no matter how highly qualified the audit was.
Requirements for ethical qualities
Auditors must have professional ethics, always work with the highest caution with diligent working spirit. Any carelessness can lead to audit risks, thereby affecting the subjects using audit reports and the auditor's liability. During the audit process, it is necessary to ensure that he is honest and honest and has a clear opinion. At the same time, auditors must be fair, respect the law, respect the truth and not be biased.
Requirements on capacity and profession
Fundamental principles governing an audit require the auditor to perform the work with the necessary expertise ... To ensure that adequate and appropriate audit evidence is obtained, the auditor must have the expertise. solid professional knowledge and understanding of the business field of the customer, have skills, experience in auditing and knowledge of the law.
Users of audit results trust and appoint auditors because of the quality of the auditor's independent practice and ability in professional expertise and objective ethical qualities in their work. .
"Master" of the big bosses #
Auditing profession is associated with the history of development of many large corporations in the world, as well as the flourishing of Western countries during centuries of upheaval.
Thanks to the auditing companies, the big guys in the market have found suitable businesses to invest. Auditors are also the ones who find the loopholes that make profits in corporations be lost or recorded inappropriately.
In addition, it is sometimes the auditing firms who provide transformation opportunities to financially troubled companies. Thanks to the advice of auditors, companies in financial difficulty understand their situation. Then, gradually overcome the gaps in cash flow management and perform restructuring to improve production and business activities. They even help companies find suitable partners in the merger process.
The market economy requires businesses of all economic sectors to manage and operate production and business to have accurate, timely and reliable information. Thereby, it shows that the importance of auditors is increasing corresponding to the diversified changes and developments of today's economy.