Auditor Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Auditor, written in plain English, along with examples of how it is used.
What is Auditor?
(n) Auditor is the person appointed to conduct an examination of the records, to form an opinion about the authenticity and correctness of such records, by verifying the correctness and reliability of the recorded transactions from the evidences available, opinion and inference reachable based on his expertise
History and Meaning of Auditor
The term auditor is derived from the Latin word “audire” which means “to hear”. In early Rome, people who were responsible for maintaining the financial records of organizations would orally present their findings to the members of the organization. Over time, the practice of presenting financial records orally evolved into a more formal process in which an independent person was appointed to examine and verify the accuracy of the financial records.
Today, an auditor is an independent professional appointed to examine the financial statements and records of an organization. The auditor must form an opinion about the authenticity and correctness of the records while verifying the reliability of the recorded transactions.
Examples of Auditor
A public company hires an auditor to inspect its financial statements to ensure they are accurate and comply with generally accepted accounting principles.
An employer asks an auditor to review the expense reports of its employees to ensure that they are complying with company policies.
A government agency hires an auditor to examine its operational processes to determine whether they are efficient and effective.
Legal Terms Similar to Auditor
Financial Statement: A financial statement is a formal record of an organization's financial activities.
Internal Control: Internal control includes the policies and procedures implemented by an organization to ensure the integrity of its financial statements and prevent fraud.
Compliance Audit: A compliance audit is an examination of an organization's financial records to ensure that it is complying with applicable laws and regulations.