What are the most common problems you encounter as an auditor, and how do you solve them?

A common problem that the auditor faces is innumerable iterations wrt the same issue by various people. As a consequence, discussions get pushed to the wire and the auditor is then under pressure to close the issue. Timeliness for discussion and closure of all significant issues arising out of audit must be invariably pre- agreed, dates frozen and the conclusions should be "lets close these issues unless either of us have anything tangible to say otherwise that is in accordance with the regulations or the standards"

As an auditor, there are several common problems that I frequently encounter. One of the most prevalent issues is the lack of documentation or incomplete records, which can make it difficult to assess the accuracy of financial statements. To solve this problem, I often request additional information or conduct interviews with relevant personnel to gather the necessary evidence. Another common challenge is the presence of fraudulent activities or misappropriation of assets. In such cases, I employ forensic accounting techniques and investigate suspicious transactions to uncover any irregularities and bring them to the attention of management or appropriate authorities.

The standards of auditing, as outlined in SA 200, dictate that the primary objective of an auditor is to attain reasonable assurance that the financial statements are devoid of any material misstatements and are in accordance with the relevant financial reporting framework. Non-compliance with standards established by regulatory bodies such as the ICAI and NFRA poses a significant challenge for auditors during the audit process. Common scenarios in which such challenges arise include: 1. Inadequate knowledge among employees regarding the applicable standards. 2. Insufficient oversight by management in the application of standards. 3. Lack of training for employees to stay updated on relevant standards and compliance requirements.

This problem is faced by almost every auditor in the industry. The thing is the employees of the auditee sees the auditor as if we have come to point out every mistakes they do for our satisfaction. But the point here is, yes we have come to point out the mistakes. But the whole purpose of pointing it is to improve the organisations compliances, avoid heavy penalties from governments for non-compliances and improve the organisation as whole. So the audit is not on the individual's work, but on the works of the organisation on whole.

Another issue is the lack of appreciation by an auditee of the value that an audit brings. While the process is challenging (it’s the same for the auditor as well), the auditee acknowledging the benefits arising from an audit (compliance with framework, public trust, access to benchmarking of practices through the auditor’s experience, lower cost of capital) can significantly boost the overall experience for both parties.