Role played by professional auditors in Uganda
Auditing is the independent examination of financial statements and the underlying books of account so as to form an opinion on whether they are prepared in all material aspects in accordance with the financial reporting framework. Such reporting framework includes International Accounting Standards (IAS), the Companies Act Cap 110 (for Uganda) and any other relevant legislation. This is however carried out by a person termed as auditor. Internal Audit, Internal audit is conducted by the internal auditor who is an employee of an organization. The main purpose of internal audit is to find out whether the internal control system is working successfully or not. The report of the internal audit is used only by the management for the improvement of internal control system. The internal auditor carries out checking work throughout the year. Although, he is an employee of the organization but he is given some form of independence in order to perform his duties more efficiently. External Audit, These are the audit other than internal. They are performed by external auditors. The main purpose of this audit is to report on the true and fair view of the accounts. Statutory audit, Conducted in accordance to the Companies Act requirement and its main objective is to prove the true and fair view. Auditors’ scope of work is defined by statute. It is commonly done by the following limited companies, cooperative societies, government, insurance companies, building societies, banks and parastatals. Private Audits, Non statutory audit’s main objective is to detect and prevent errors and fraud. The auditor’s scope of work is decided on by an agreement between the management and the auditors. The auditors of a company other than internal auditors are appointed by members (shareholders) in an annual general meeting; however, the directors can appoint the first auditor to fill a casual vacancy this requires the members’ approval at the next annual general meeting. Auditors are appointed to runs from one annual general meeting to the next one. Internal auditor of a company is an employee of a company and therefore he/she is appointed by the management of the company. He/she is also expected to carry out his/her duty according to the directive of the management. Private companies no longer have to hold an annual general meeting if an elective resolution is made. In these circumstances the auditor is automatically reappointed unless a shareholder objects (Small companies can elect to dispense with the requirement for an annual general meeting). Below are the roles of auditors of a company
Ensure that any capital expenditure that is, purchase or sales of a fixed asset, capital commitment, and payment of a major liability have been duly authorized by the meeting minutes of the Board of Directors.
The auditor of a company shall make report to the members on the accounts examined by them and on every balance sheet, every income statements and on all group accounts laid before the company in a general meeting during their tenure of office Every company must hold an annual general meeting of its members in each calendar year. At that meeting, annual report and audited accounts (including balance sheet and income statement and in the case of a holding company, a group accounts) are laid before the meeting. Included in the annual report and accounts, there must be a report by the auditors on the accounts examined by them The auditor usually appointed at annual general meeting and hold office from the end of that meeting until the end of the following annual general meeting, which is his tenure of office. He reports on the account presented within his tenure office. The auditor report shall be read before the company in a general meeting and shall be open to inspection by any number.
Content of the report
It requires that in his opinion, auditor state whether the report is; •
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