A thorough structure outlining the authority, responsibilities, and obligations of a corporate auditor is provided under the Companies Act of 2013. Assuring that a company's financial statements are accurate, dependable, and compliant with relevant laws and accounting rules is the primary goal of an auditor. Additionally, auditors are subject to a number of legal and criminal penalties under the Companies Act of 2013 for negligence, fraud, and other misbehavior. If the auditor missed any signs of fraud or inaccuracies in the financial accounts, they could also be held accountable for any losses incurred by the company or its shareholders.

An auditor is a qualified individual hired by a business to examine its financial accounts and offer a separate assessment of their completeness and accuracy. In order to guarantee the accuracy and dependability of the financial data a company presents, auditors play a crucial role. An auditor is required by law to perform their work with appropriate care and diligence and to adhere to auditing norms and regulations under corporate law. Regarding whether the company's financial statements present a truthful and fair picture of its financial situation, operating results, and cash flows, the auditor is expected to provide an opinion. The requirements for eligibility and the process for the appointment of auditors are outlined in India's Companies Act, 2013.

It stipulates that specific categories of businesses must designate independent and competent auditors to carry out the audit. The Act also specifies the rights and responsibilities of auditors, the processes and guidelines for their dismissal, and the consequences of breaking the law.

Maintaining the accuracy of financial reporting and making sure that businesses run ethically and transparently are important tasks for auditors. Their efforts support the development of confidence and trust among all parties involved, including the public, shareholders, investors, and regulators. In addition to being a crucial line of defense against financial crime and mismanagement, auditors' responsibilities and rights are also critical to maintaining the integrity and openness of financial reporting.

Definition Of An Auditor

A professional that inspects and assesses financial records, systems, and procedures to make sure they are accurate, dependable, and compliant with relevant laws, rules, and accounting standards is known as an auditor. Most auditors work for accounting firms or for themselves as internal auditors in companies. Their main objectives are to identify risk areas and areas for improvement and to give an unbiased, independent review of the financial health and operations of an organization.

Based on their research, they compile comprehensive reports that help stakeholders, including management and investors, make defensible decisions. The word and "comptroller" can be used interchangeably at times. "To hear" is the meaning of the Latin word "audire." The term "audire" and the individual designated to review the accounts are the sources of the word "audit."

Rights Of An Auditor

The Companies Act, 2013 grants various rights and powers to the auditor of a company.

Some of the key rights of the auditor under the Act are as follows:

• Right of Access: Every auditor of a company is entitled, at all times, to access the books, accounts, vouchers, documents, and other necessary records, whether they are kept at the company's headquarters or somewhere else, as well as the returns that the branch office submits to the headquarters, per Section 143(1) of the Act.
• Right to Obtain Information: The company's executives and workers are entitled to provide the auditor with any information and justifications that he needs in order to carry out his obligations.
• Right to Attend Meetings: The auditor is entitled to notices and other communications regarding any general meeting of the firm, as well as the ability to attend such meetings.
• Right to Make Representations: If at all possible, the auditor may address the audit committee, the board of directors, or the company's members in a general meeting regarding any issue pertaining to the company's financial statements or the audit report.
• Right to Report Fraud: Any fraud perpetrated by the company or its officers, or any suspicion that fraud has been committed by them, must be reported by the auditor to the Central Government.
• Right to Seek Legal Assistance: The auditor has the right to seek legal assistance or advice from an advocate or a solicitor if he considers it necessary for the performance of his duties.
• Right to Be Heard: In any meeting of the audit committee or the board of directors that he attends, the auditor is entitled to speak on any issue pertaining to the company's financial statements or the audit report.

Along with these responsibilities, an auditor must also follow the norms and auditing standards set forth by the Institute of Chartered Accountants of India (ICAI) and perform the audit in conformity with widely accepted auditing standards. These privileges are meant to protect the interests of the business and its stakeholders while enabling the auditor to perform his duties in an efficient and impartial manner.

Liabilities Of An Auditor

As per the Companies Act, 2013, the auditor of a company has several liabilities, which are as follows:

• Liability for negligence: An auditor may be found negligent if they fail to carry out their responsibilities with a reasonable degree of care and skill, and the company suffers losses as a result.
• Liability for misstatement: The auditor may be held accountable for any losses incurred by the business or its shareholders if they make a false statement or omit a relevant fact from their audit report.
• Liability for non-disclosure: The auditor may be held accountable for non-disclosure if they omit any information required by law, including related party transactions or the auditor's own conflicts of interest.
• Liability for non-compliance: The auditor may be held accountable for non-compliance if they disregard the legal requirements for auditing standards or the auditing guidelines set forth by the Institute of Chartered Accountants of India (ICAI).

Overall, the auditor of a company is responsible for ensuring that the financial statements of the company are accurate and free from material misstatements. They must exercise due care and diligence in carrying out their duties to avoid any legal liabilities.

Duties Of An Auditor

Under the Companies Act 2013, the primary duty of an auditor is to express an opinion on the financial statements of the company.
The following are some of the key duties of an auditor under the Companies Act 2013:

• Duty to report fraud: The auditor is required by law to notify the Board of Directors and the company's management of any fraud or suspected fraud that they discover while doing the audit.
• Auditing Financial Statements: The company's financial statements must be audited by the auditor, who will then express an opinion regarding whether the financial statements are presented accurately and in compliance with accounting standards in all important aspects.
• Reporting on Internal Financial Controls: The auditor is required to report on the internal financial controls of the company, including the adequacy and effectiveness of the controls.
• Reporting on Fraud: The auditor is required to report any instances of fraud or suspected fraud that comes to their attention during the course of the audit.
• Reporting on Related Party Transactions: Any linked party transactions that are outside of the regular course of business or that could affect the financial statements must be reported by the auditor.
• Reporting on Corporate Social Responsibility: The company's compliance with its corporate social responsibility (CSR) duties, including the amount spent on CSR initiatives, must be reported by the auditor.
• Reporting on Loans, Investments, and Guarantees: The auditor is required to report on the company's compliance with the provisions of the Companies Act 2013 related to loans, investments, and guarantees.
• Reporting on Director's Report: The auditor is required to report on the compliance of the Director's report with the provisions of the Companies Act 2013.
• Auditor to sign audit reports: (According to see 145), the auditor's report and any other document of the company that is legally required to be signed or authenticated by the auditor may only be signed by the individual designated as the company's auditor. Any qualifications, observations, or remarks on financial transaction matters included in the auditor's report that could negatively impact the business's ability to operate must be read aloud in a general meeting and made available for inspection by any member of the company.
• Right to remuneration: An auditor is entitled to payment after finishing his work. Articles of incorporation or member resolutions cannot restrict or waive the auditor's rights. The compensation of a company's auditor is set at the general meeting or in any other way decided upon there. It does not include any compensation paid to the auditor for any other services he performed at the firm's request, but it does include any costs, if any, he expended in connection with the audit of the company and any facilities provided to him.

Conclusion
A number of measures have been included by the Companies Act 2013 to improve the auditors' independence and responsibility. Apart from their mandated responsibilities, auditors must also utilize professional judgment and skepticism in their work. They have to uphold a high standard of professionalism and moral behavior, be willing to confront management and offer helpful criticism on their internal control and financial reporting procedures.

All things considered, the auditor is essential to maintaining the accuracy of financial reporting and fostering trust in the capital markets. The auditor supports the effective use of capital and protects the interests of stakeholders and shareholders by offering an unbiased, impartial evaluation of a company's financial statements.

An auditor is 'watch dog' not a 'blood hound'. Like a dog should bark and chase when something found wrong. Same like that duty of auditor is to verification and detection, but he must go deep if suspicion arises. His business is to ascertain and state true financial position of the Company as the time of audit, and his duty is confined to that. He should do so by examine the books of the Company.