RESPONSIBILITIES

MANGEMENT
Management is responsible for preparing financial statements which give a true & fair view of the company's results for the period under review and its financial position at the year end.
In order to do this the directors are required to:

• Select suitable accounting policies and apply them consistently.
• Make judgements and estimates that are reasonable & prudent.
• Design & implement internal controls relevant to the preparation of financial statements and to prevent and detect fraud or error.

EXTERNAL AUDITOR
The auditor's main responsibility is to form an opinion on whether the company's financial statements give a true & fair view.

• Effects of significant accounting policies.
• Potenial financial effect of risks/uncertainities.
• Material audit adjustments.
• Internal control weaknesses including fraud.
• Disagreements with management concerning the financial statements.

In some jurisdictions the external auditor's have further reporting responsibilities, e.g.

• The auditors of listed companies in the UK report on certain aspects of the disclosures of director's remuneration.
• Auditors in the Republic of Ireland report on certain aspects of the adeqaucy of a company's capital.

INTERNAL AUDITOR
The internal auditors are either:

• Employees of the organization they are auditing or
• Contracted to provide internal audit services through an outsourcing arrangement.

ISA 610 considering the work of internal audit gives the main activities of the internal audit function as:

• Monitoring of internal control.
• Examination of financial & operating information.
• Review of the economy, efficiency & effectiveness of operations including non-financial controls of an entity.
• Review of compliance with laws, regulations & other external requirements & management policies & directives and other internal requirements.
• Special investigations into particular areas, for example, suspected fraud.