Auditors, Shareholders and Upholding Integrity

The role of the auditor in the annual corporate lifecycle is one of tremendous importance. From a business perspective, calling in the auditors should provide a thorough review of your finances and should help uncover any irregularities in accounting policy and procedure. From the point of view of the shareholders, the auditor is a vital cross-check that ensure their investment is in safe hands, and that they are being provided with a clear and factually accurate reflection of the finances of the company through traditional reporting functions, such as the annual accounts presented before the AGM.

But how does the role of auditor interrelate with the objectives of both sides to the investment arrangement? Acting as auditor is a serious obligation, and requires the utmost professional attitude. Particularly in smaller to medium entities, the role of auditor can be practically difficult, even with the proper auditing resources, given the proximity of all parties to the auditing arrangement. For the would-be auditor, it's vitally important to consider that whilst it might be the company engaging their professional services, any professional duties owed by the auditor are to the shareholders as a collective, and as paramount, they must strive to ensure that they act with integrity and honest at all times in a distant, professional manner. Given the nature of auditing, there may be occasions where some irregularity or other may appear.

In this event, the auditor must avoid persuasion and reassurance in favour of solid hard evidence, in order to paint a true and accurate reflection of the company's financial position. While reputations are at stake, there is also the matter of auditors liability which, depending on your jurisdiction, is personal and potentially unlimited. As such, the role of the auditor demands integrity, caution and a dedicated interest in upholding honesty and enforcing accounting policy.



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