What Does a City Auditor Do?

Auditor is a professional who specializes in checking and further confirming the correctness, rationality and acceptability of the company's accounting books and reports. The auditor is a senior employee of the company.

Auditor

A company can have one or more auditors, whose appointment and removal rights are

The remuneration of the auditors shall be determined by the shareholders 'general meeting, or determined by the company in the manner that can be adopted at the shareholders' general meeting. If the auditor is appointed by the company's competent authority, its remuneration should also be determined by that department.

Auditors must be professionally trained and qualified as auditors after evaluation. The following persons shall not serve as auditors:

Already an employee or service person of the company;

is a partner of the company;

is an economic group;

People who have economic contacts and contacts with the company.

The functions of auditors are regulated by the company law and are mainly to confirm,

The following basic rights of auditors are usually provided by company law, which cannot be restricted by any company's internal rules:

The auditor has the right to check the company's accounts, documents, contracts,

The auditor must perform his duties impartially and honestly and keep the company's relevant secrets;

The auditor shall bear the responsibility for financial compensation for the losses suffered by the company, shareholders or creditors due to dereliction of duty.

Legal composition

The audit responsibility of a certified public accountant must meet the following legal constitutional requirements,

First, the qualified subject, that is, the subject that bears the audit responsibility, must be a certified public accountant or related organizations and individuals involved in audit activities. All organizations and individuals involved in audit activities can constitute the subject of audit responsibility, including certified public accountants. , Accounting firms, chief accountants and experts and assistants engaged in audit activities.

Certified public accountants are responsible for their own audit actions and results, and they are responsible for auditing. Generally speaking, the project leader (certified accountant) responsible for audit activities should be responsible for their audit actions and results, that is, the audit process should comply with the Independent Auditing Standards. And maintain due professional care, otherwise, they shall bear the corresponding audit responsibilities (including legal and professional responsibilities); the certified public accountants signed in the audit report shall be responsible for the results of the audit activities, and shall bear all or all of the external responsibility Auditing responsibility of the accounting firm; in the audit report, the official seal shall be directly responsible for the acts and results of the audit activities of the certified public accountant as a legal person; at the same time, in the audit report, the official accountant s authority is the responsibility of the chief accountant. Or authorize the act, and the chief accountant undertakes the final level of the three-level review, and therefore shall bear corresponding audit responsibility for all audit activities of the firm; in addition, the chief accountant is directly responsible for the conclusions of the audit report signed by him; he is engaged to participate in the audit Event experts and assistants To assume responsibility for their respective work.

Second, the subject is at fault, that is, the subject is at fault or fraudulent;

Third, the behavior is illegal, that is, the wrongdoing of the subject violates the relevant laws and regulations or the provisions of business agreements;

Fourth, there is the fact of damage, that is, property damage has been caused to the other party;

Fifth, causality, that is, the relationship between the subject's illegal acts and the fact of the damage, is the key to determining whether a particular damage should be the legal responsibility of the subject.

Definition of powers and responsibilities

(1) Lead and manage the audit working group. Act as the team leader or chief reviewer of the audit working group, reasonably arrange and adjust the work of the team's personnel and conduct supervision and inspection according to the needs of the audit project, and take responsibility for the audit risks caused by the poor performance of the audit working group;

(2) Responsible for preparing the specific implementation plan of the project. In the event of unforeseen circumstances of the audited event, non-significant audit events and significant impacts may have the right to adjust the implementation plan according to the audit objectives; audit responsibility

(3) Responsible for and guide the investigation before audit implementation and issue an investigation report, prepare an audit plan and organize implementation according to the investigation report;

(4) The right to hire or consult specialized agencies and personnel proficient in certain technical fields according to the technical level of the audit project;

(5) Responsible for the verification of audit evidence to ensure that the acquisition of audit evidence is appropriate and legal, and that the audit evidence itself is not flawed;

(6) Responsible for the review of audit work papers, and take responsibility for the fairness and authenticity of audit work papers;

(7) Organize the audit team's discussion of the audit report and finalize the audit report, with its due attention and diligence to ensure that the work report issued by the audit team is free from facts and legal flaws, Professional judgment ability to ensure that the audit report is constructive;

(8) For the audit decision for reconsideration, non-auditors and interested parties in this case may preside over the audit hearing;

(9) To be able to form an audit committee to review and evaluate major audit matters;

(10) It has the right to make timely suggestions on the establishment of audit projects based on its professional judgment ability;

(11) According to the actuality of the audit project, it has the right to independently determine the working methods and technical methods to be adopted by the audit working group, and bear the main responsibility for the legal consequences of this;

(12) The final treatment opinions on the audit project implemented, based on the scope and impact of the audit project, non-significant matters and impacts, can be decided to deal with punishment.

Definition of powers and responsibilities of assistant auditors

The assistant auditor assists the auditor in the audit working group to carry out the audit work and performs his duties in accordance with relevant laws and regulations and administrative systems.

Cause of formation

The reasons for the formation of CPA audit responsibilities involve many aspects, but the main aspects are as follows:

1. The diversification of accounting objectives has increased the audit risk of CPAs.

The different requirements of accounting information from managers, investors, creditors, and national tax collection and management make the accounting treatment have to balance between these requirements, thereby increasing the controversy of the interpretation of accounting information. Due to the changes in the economic environment, the complexity of accounting information processing and the increase in conflicts between different levels of understanding, it will inevitably lead to audit risks.

2. The market operation mechanism is unreasonable and affects the independence of the CPA.

First, there are serious flaws in corporate governance. The equity structure of Chinese listed companies is malformed, state-owned shareholders are absent, or a phenomenon of dominance is common. The phenomenon of "internal control" is very serious. Coupled with the audit commissioned by the auditee, the independence of the certified public accountant will undoubtedly be affected by the auditee. It will almost become a "rational choice" to accommodate and acquiesce in the market competition in the incentive. Secondly, unqualified state-owned enterprises' conversion and listing and improper intervention by local governments will also increase the audit risk of CPAs.

3 Under the market economy, the economic consequences of accounting information increase audit responsibility.

Under the conditions of a market economy, the decision-making role of accounting information has become very important. A small erroneous accounting information may lead to the erroneous flow of tens of thousands, hundreds of thousands, or even hundreds of millions of funds for the entire society. It is precisely because the economic consequences of accounting information are becoming increasingly prominent. When there is an economic consequence that should not occur, or when the two parties who identify the accounting information and use the accounting information have different views on this economic consequence, it will bring legal conflict. Therefore, the increase in the economic consequences of accounting information will also cause related audit liability issues.

4 Excessive public expectations are the main reason why CPAs encounter audit litigation.

There is a difference between the public's understanding of the role of independent auditing and the results of auditing by certified public accountants and the industry's views on audit performance, that is, differences in audit expectations. Due to the limitations of auditing technology and costs, and modern auditing is a system-based audit based on the evaluation of internal control, certified public accountants cannot expect to find all errors and frauds of enterprises through auditing. However, the public often regards audit opinions as guarantees or guarantees for accounting statements. When they find that their interests have been damaged by being misled by inaccurate accounting information, they often push the CPA to the defendant's seat.

5. The imperfect construction of the accounting firm system is a "lethal factor" for CPAs to be held accountable.

(1) The limited liability system adopted by accounting firms has led to an important reason for the formation of auditing responsibilities. Because the registered capital of several hundred thousand yuan bears a business involving hundreds of millions and billions of dollars. In this case, the firm's failure costs are low, but the potential benefits are high. Therefore, in order to maximize the benefits, on the one hand, we try to "compress" audit costs and ignore the construction of quality control policies and procedures; on the other hand, in order to win customers, we often hesitate to reduce the quality of audits and even collude with the audited entities to issue false reports . Limited liability has created a "firewall" for accounting firms and certified public accountants to avoid civil liability.

(2) CPAs do not attach importance to the improvement of their own quality, fail to expand their professional knowledge in a timely manner, and face the rapidly changing market economy, which is difficult to meet the needs of business development. In addition, certified public accountants lack the professional caution and professional ethics that they should have, professionalism is not strong, audit procedures have dealt with things, and even inside information is used for personal gain. These reasons originated from the industry and became the "lethal factor" for CPAs being held accountable.

6. The contradiction of the relevant legal provisions of the certified public accountant has caused the complication of audit responsibility.

In order to clarify the legal responsibilities of certified public accountants and maintain market economic order, the Criminal Law, the Certified Public Accountants Law, the Securities Law, and the Company Law promulgated by the state have all involved provisions related to the legal liabilities of certified public accountants. These series of regulations play an important role in maintaining the order of market operations. However, due to changes in the external environment and the sequence of legislation, there are many contradictions in the provisions of these existing laws that involve the auditing liability of certified public accountants. For example, specific legislation, which does not classify the criminal infringement object as the criminal law, will lead to inconsistent and unbalanced standards when investigating the legal responsibility of certified public accountants; emphasizing the substantive law and despising the procedural law brings compensation to accounting firms. Contradictions in procedural issues; accounting firm compensation issues caused by the interpretation of other judicial documents, etc. These phenomena have complicated the legal liability of CPAs.

7. The undifferentiated audit report system is the main reason why the current audit risk is expanding.

An indiscriminate audit report system refers to the different requirements for the format and content of an audit report that do not distinguish between audit purposes (or use purposes), uniformly use a uniform reporting model, and do not indicate the use purpose of the report in the audit report. An audit system. This facilitates the use of audit reports for non-audit purposes by the client and adds additional risk to the CPA.

Auditing standards require that the certified public accountant must clarify the purpose of the audit, and the audit engagement agreement also has a clear agreement on the purpose of the audit. The certified public accountant plans and implements the audit work according to the purpose of the audit. The audit objectives differ according to the focus of the audit procedures. The audit report is objective and appropriate when it is used for the agreed purpose, but it may not appear objective and appropriate when it is used for non-contracted purpose, and the existence of this risk is obvious.

And accounting responsibilities

Accounting responsibilities and audit responsibilities are two different types of responsibilities. The Accounting Law stipulates that ensuring the authenticity and completeness of accounting information is the responsibility of the audited unit. The person in charge of the unit is the legal representative of the unit. On behalf of the unit, in exercising its powers according to law, it shall be responsible for the accounting behavior of the unit and become the subject of accounting responsibility. In other words, the auditing responsibility of a certified public accountant cannot replace, reduce or relieve the accounting responsibility of the person in charge of the unit. The accounting information of a unit is seriously distorted, and there are major errors, frauds or illegal acts in the accounting statements. The person in charge of the unit must first assume the accounting responsibility.

The connection between the two is mainly manifested as:

1. Consistency of work goals.

The work of both the audited unit and the audit unit is part of the economic management work. In the work, they are based on the relevant laws, regulations and rules of the country, provide true and reliable financial and accounting information to relevant interests, and safeguard the legitimate rights and interests of all parties. Therefore, the goals are the same.

2. Objective basis of identity.

Both the audited unit and the audit unit perform their functions based on the economic activities that have been achieved by the same enterprise. That is, both reflect and monitor the economic activities of the same accounting entity. Therefore, their objective basis is the same.