External auditor is independent person who is hired by owners of the entity (company, sole proprietor,or partnership) to give assurance on the financial statements by giving his opinion on whether the financial statement prepared by management show true and fair view. External auditor reach his conclusion by performing audit procedures which include substantive procedures, control test and risk assessment procedures.
What are external auditor’s responsibilities?
The main responsibility of external auditor is to give assurance to owners of the entity on whether the financial statement show true and fair view. He his hired to perform this job because he is independent and he has required competence and knowledge to give opinion.
when performing his primary responsibility of giving opinion on financial statements other responsibility may arise. These responsibility are termed as secondary responsibilities since auditor his not expected to perform them on his contract (engagement letter) with shareholders. these responsibilities include:
- assessment of internal control
- Assessment of compliance with laws and regulation
- Detection and prevention of fraud and errorsensuring that management keep accounting records as required by financial reporting framework
It should be understood that auditor perform secondary responsibility only to the extent that they enable him to give reasonable assurance on whether the financial statements of the entity give true and fair view.