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The auditor must expose management’s incompetence. ans: False
Maam could you explain why exactly the auditor should not expose management’s competence? like where auditor detects inconsistencies between other information (chair’s statement/CSR report/ management commentary) or where he detects inconsistencies in applications of accounting standards by management. So, in such cases auditor should prompt the shareholders that their money is in wrong hands, why not?
The auditor audits FINANCIAL STATEMENTS – not people. Financial statements that “present fairly, in all material respects” in accordance with the applicable financial reporting framework are a reflection of management’s stewardship. If the shareholders don’t like the results presented in the financial statement, they can remove directors.
The auditor does report MATERIAL inconsistences/misstatements as matters of fact/professional opinion – this should be sufficient prompt to the shareholders without adding “oh – and by the way – I think your chairman is incompetent” … even if that were true and not libelous – what about the fundamental ethical principle of professional behaviour?
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