Qualities of an Auditor:- An auditor must have the following qualities:-
- He/she must have complete knowledge of general accounts, income tax, cost accounting etc. He/she should be aware of the latest development of the technique of accounting.
- He/she should not pass any transaction unless he/she knows that it is correct. It is possible when sh/she knows thoroughly well the principles of accounting.
- He/she should be able to grasp quickly the technical detail of the business whose accounts he/she is auditing.
- He/she should not show his/her proud of his/her qualification or position.
- He/she should be quite familiar with the company and mercantile laws and must be a complete master of the principles of auditing.
- He/she must be honest. He/she must not certify what he/she does not believe to be true.
- He/she must not be influenced directly or indirectly by other in the discharge of his/her duties.
- Some times he/she is put in a very awkward position, when his/her duty to his/her client is opposed to his/her own interest. In this case he/she must have the courage to carry out his/her duty faithfully and honestly. It will pay in the future.
- He/she must be prepared to resign rather than sign a balance sheet, which he/she knows that it does not give the true and correct position.
- He/she should not disclose the secrets of his/her client.
- He/she should have the tact to put intelligent questions to extract full information.
- He/she must not adopt an attitude of suspicion.
- He/she must be prepared to hear arguments and must be reasonable.
- He/she must be able to write the report clearly, correctly and forcefully.
- He/she must have a thorough training in business organization, management and finance.
- Last but not least, he/she should have common sense.
Qualification of Company Auditor:- As per section 226 of companies act, a person should not be qualified for appointment as an auditor or a public or private company unless he is a chartered accountant within the meaning of the Chartered Accountant Act,1949.
According to section 226(2), a person holding a certificate under Restricted Auditors Certificate (Part – B states) Rules,1956, is also qualified t act as an auditor of a company.
However, the Central Government may grant, renew, suspend or cancel and make other rules for such certificates by notification in the official Gazette.
Disqualification of Company Auditor:- Following are the disqualification of a company auditor:-
- An auditor can not be a body corporate.
- An auditor can not be an employee of officer of the company.
- A person who is a partner or who is in the employment of an officer of the company, can not be the auditor of the company.
- A person who is indebted to the company for an amount exceeding one thousand rupees, can not be the auditor of the company.
- A person who is a member or a director of a private company or partner in a firm which is the managing agent or the secretaries and treasurers of the company, can not be the auditor of the company.
- A person who is a director or holder of shares of more than 5% in nominal value of the subscribed share capital of any body corporate which is the managing agent or the secretaries and treasures of the company, can no be the auditor of the company.
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