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Question
Who will be responsible for errors in report if external auditor relies on the work of internal auditor?
Who will be responsible for errors in report if external auditor relies on the work of internal auditor?
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Solution
The correct option is A External auditor
An auditor's report provides an opinion of the validity and reliability of a company or organization's financial statements. The goal of an auditor's report is ultimately to document reasonable assurance that a company's financial statements are free from material error.
Under section 143(3) of the Companies Act, 2013, the duties of the auditor which relate to his report are that the auditor shall report to the shareholders on the accounts examined by him.
Thus external auditor has a duty to present fair and true position of the company. He is the person who is reviewing the work of internal auditor. If there is a lapse in his duty then he will be responsible.
An auditor's report provides an opinion of the validity and reliability of a company or organization's financial statements. The goal of an auditor's report is ultimately to document reasonable assurance that a company's financial statements are free from material error.
Under section 143(3) of the Companies Act, 2013, the duties of the auditor which relate to his report are that the auditor shall report to the shareholders on the accounts examined by him.
Thus external auditor has a duty to present fair and true position of the company. He is the person who is reviewing the work of internal auditor. If there is a lapse in his duty then he will be responsible.
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