An auditor is primarily concerned with reporting on the financial position of an organization and on the results of its operations for a period of time. Auditors are hired to express an opinion as to whether the published financial statements of the organization are true and represent a fair view of their financial position and the results of its operations for the period for which such statements are prepared.
The auditor is responsible for ensuring that financial statements are properly prepared free of material misstatement caused by error or fraud. To form an opinion on the financial statements, the auditor seeks to obtain reasonable assurance as to whether the information contained in the underlying accounting records and other source data are reliable and whether the relevant information is properly communicated in the financial statements.
The auditor's report is addressed to shareholders but used by many other parties, such as depositors and creditors.
Auditors also make judgements as to the organizations continuing viability during the period immediately following the period for which the financial statements are prepared in order to support the going concerning basis on which such statements are prepared.
The auditor's opinion helps to establish the credibility of financial statements but shareholders should not interpret the auditor's opinion as an assurance as to the future viability of the organization, future financial success and future cash dividends. Investors are not guaranteed they will not suffer losses from investing in the company's securities, and as to the efficiency or effectiveness with which the management has conducted the affairs of the company, since these are not the objectives of the audit.