Independent Auditor Relationships: Management, Shareholders, Board of Directors and Audit Committee

In a financial statement audit, the auditor maintains professional relationships with four important groups: (1) management, (2)stockholders (3) the board of directors and audit committee. All of this independent auditor relationships are discussed below:

Independent auditor relationships

  1. ManagementIn an auditing context, management refers to the company officers, controller, and key supervisory personnel. During the course of audit, there is extensive interaction between the auditor and management. To obtain the audit evidence, the auditor often requires confidential data about; the entity. It is, therefore, imperative to have relationship based on mutual trust and respect.
  2. ShareholdersShareholders are the owners of the company. The auditor is supposed to work in the best interest of the shareholders. So, there should be a good relationship between the auditor and the shareholders. 
  3. Board of Directors and Audit CommitteeThe board of directors of a corporation is responsible for seeing that the corporation is operated in the best interest of the stockholders. The auditor’s relationship with the directors depends largely on the composition of the board. When the board consists primarily of company officers, the auditor’s relationship with the board and management is essentially .one and the same. However, when the board has a number of outside members, a different relationship is possible. The board can help the auditor in providing with necessary information relating to the operation of the entity.
independent-auditor-relationships

Independent Auditor Relationships

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1 comment for “Independent Auditor Relationships: Management, Shareholders, Board of Directors and Audit Committee

  1. Rena
    May 19, 2016 at 8:44 PM

    Its kind of rare article on internet but at last got it and it clear my concept about independent auditor relationship.

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