Auditor – myths and reality

What an auditor does and does not do during a financial audit

Auditor does	Auditor does not
Controls whether the annual report is in accordance with the accounting principles Controls the implementation of tax calculation principles to the extent necessary from the point of view of the annual report as a whole Controls that third parties would get an adequate picture of the company when reading the annual report Provides reasonable assurance with his/her work Focuses on material financial indicators Requests evidence in order to fulfil the requirements under law	Does not prepare the client’s annual accounts, including choosing the accounting principles and making accounting estimates Does not work out the internal control system Does not give, within the audit framework, a comprehensive assessment of the performance of the company’s internal control system Does not prepare, within the audit framework, internal accounting policies and procedures for the company Does not perform a tax audit Does not examine how perfect is the accountant’s work Does not compile the consolidation table Does not compile cash-flows Does not provide 100% assurance Does not pursue every last euro Does not take responsibility from the management Is not a paranoid sceptic

Auditor does

Auditor does not

Controls whether the annual report is in accordance with the accounting principles
Controls the implementation of tax calculation principles to the extent necessary from the point of view of the annual report as a whole
Controls that third parties would get an adequate picture of the company when reading the annual report
Provides reasonable assurance with his/her work
Focuses on material financial indicators
Requests evidence in order to fulfil the requirements under law

Does not prepare the client’s annual accounts, including choosing the accounting principles and making accounting estimates
Does not work out the internal control system
Does not give, within the audit framework, a comprehensive assessment of the performance of the company’s internal control system
Does not prepare, within the audit framework, internal accounting policies and procedures for the company
Does not perform a tax audit
Does not examine how perfect is the accountant’s work
Does not compile the consolidation table
Does not compile cash-flows
Does not provide 100% assurance
Does not pursue every last euro
Does not take responsibility from the management
Is not a paranoid sceptic