An efficient auditor must have certain qualities besides Professional qualification. He needs to carry out the audit efficiently and smoothly.
It is very important for an auditor to be well versed in the fundamental principles and theory of all branches of accounting, e.g., general accounting, cost accounts, income-tax, etc. it is not possible for a person to audit the accounts unless he himself knows how to prepare them. He should be aware of the latest development of the technique of accounting so that he may modify his procedure of work.
He should not pass a transaction unless he knows that it is correct. This is possible only when one knows thoroughly well the principles of accounting.
He should be able to grasp quickly the technique of the business whose accounts he is auditing. If possible, he should pay a visit to the works of his client, before he commences his work.
He should be prepared to seek elucidation on technical questions rather than show a false pride or fear of displaying his own ignorance.
He should be quite familiar with Company and Mercantile Laws and must be a complete master of the principles of auditing.
He must be tactful and scrupulously honest, as Lord Justice Lindley has said, “An auditor must be honest, i.e., he must not certify what he does not believe to be true, and he must take reasonable care and skill before he believes what he certifies is true.” (In re London and General Bank, 1895)
He must not be influenced, directly or indirectly, by others in the discharge of his duties.
He must be prepared to resign, rather than sign a balance sheet, which he knows does not exhibit a true and fair view of the state of affairs of the concern and thus give a false report.
He should not disclose the secrets of his clients.
He must have the tact to put intelligent questions to extract full information.