Duties of an auditor with Regards to Internal Check System
The system of internal check in an organisation determines the scope of work of a statutory auditor. The duty of an auditor is to verify the effectiveness of the system of internal check in operation. However, the auditor should perform the following work in this regard.
1. To Obtain Written Statement: An auditor should obtain a written statement about the working of the internal check system from the business concern.
2. To Examine the System in Operation: The auditor should carefully examine the existence and operation of the internal check system.
3. To Identify the Weakness: The auditor should identify the weakness of the system which will result in occurrance of errors and frauds taking place.
4. To Suggest for Improvements: If the system of internal check is ineffective, the auditor should make suggestions to strengthen the system of internal check.
5. To Analyse the Extent of Reliance: The auditor should carefully analyse the extent to which he can rely on the effectiveness of internal check. If the system of internal check is effective, he can check sample transactions thus devoting his attention on other important audit work.