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Auditing is a statutory requirement for organizations as it ensures that the company owners are protected from any losses that might arise as a result of fraud, negligence and irresponsibility of the management. It is therefore important fro an organization to appoint an auditor to ensure that such cases do not happen. As an auditor, one has many responsibilities, an important one being the duty of care (Raymond, William, 2006)
An auditor is required to use his skills and reasonable care to ensure that the financial statements presented reflect the true and fair view. The phrase “true and fair view” is used to signify that the auditor has to give his opinion on the financial statements of the organization after his audit of the accounts. In order for an auditor to be able to determine whether the statements represent the true and fair view, he has to consider some major indicators for instance the auditor has to ensure that the financial statements are drawn according to the provisions of the Companies Act. He should also ensure that the information presented in the statements is not either an under or overstatement in relation to the financial position of the company that is he should heck for the materiality of the errors and variances and give his opinion based on his skills. As Cosserat and Rodda (2008) mentions in their book that an auditor is not bound to do more that exercising his skills but can be held liable if opinion the shareholders suffered financial losses as a result of action on the auditors.