Auditor in United Kingdom

Definition of Auditor

In accordance with the work A Dictionary of Law, this is a description of Auditor :

A person appointed to examine the *books of account and the *accounts of a registered company and to report upon them to company members. An auditor’s report must state whether or not, in the auditor’s opinion, the accounts have been properly prepared and give a true and fair view of the company’s financial positio The Companies Acts 1985 and 1989 set out the qualifications an auditor must possess and also certain rights to enable him to fulfil his duty effectively.

The officers of the Company: Auditors

Meaning of Auditor

The following is an old definition of Auditor [1]: One who hears: one who officially examines and allows as proper and lawful, or rejects as unlawful, the items of an account or accounts. An officer of government whose duties are, chiefly, to examine, verify, and approve or reject, the accounts of those who have disbursed public moneys or furnished supplies. Termed auditor-general, State auditor, county auditor, first auditor, etc. Corresponding in duties is the comptroller (see, in this resource, the term) of cities. States, and of the United States treasury. The office of public auditor belongs to the administrative department of government. Even where he is empowered to act upon his official judgment his functions are only quasi judicial. “To audit” an account is to hear, examine, adjust, pass upon and settle an account, and then to allow it. “To audit “is to examine and adjust an account or accounts. An “auditor” is a person authorized to examine an account or accounts, compare the charges with the vouchers, examine parties and witnesses, allow or reject charges, and state a balance. Such is the meaning when it is directed that a board of supervisors shall ” audit and allow ” the costs and expenses of a hearing to remove a cotmty officer. In a statute providing that charges for making an examination of an insurance company shall be presented in an itemized bill, which shall he audited by the comptroller, ” audit ” means hear and examine, pass upon and adjust. In such case also the word plainly refers to a judicial investigation and decision as to the merits of a claim. An ” auditor” is an agent or officer of the court who examines and digests an account for the decision of the court. He prepares the materials on which a decree may be made. He is an officer, either at law or in equity, assigned to state the items of debt and credit between parties and exhibit the balance. The term often designates an officer whose duties are properly those of a master. Originally, an auditor was an officer of the king, whose duty it was, at stated periods, to ‘examine the accounts of inferior officers and certify to their correctness. Later, the term designated an officer of the court of exchequer whose duty it was to take the accounts of the receivers of the king’s revenue and ” audit and perfect” them, without, however, putting in any charges; his office being merely to audit the accounts, that is, to ascertain their correctness. . . “To audit ” is to examine, settle and adjust accounts – to verify the accuracy of the statements or items submitted. Where the items are numerous, the testimony questionable, and the accounts complicated, a court may make a general reference, with direction to state speciflcally such matters as either party may require or as the auditor may deem necessary. See at end of Account, 1. Auditors are called in by the courts to hear matters ot detail which a court has not time to hear, and to inform, the conscience of the com’t as to facts which are essential to be known before a particular decree or judgment pan be pronounced. They are appointed to audit the accounts of assignees in insolvency, of trustees to sell realty, of executors, of administrators, of guardians, – when excepted to, or where distribution is to be made of a balance among rival claimants; also, to report upon the expediency of selling or mortgaging the realty of decedents; as to incumbrances affecting the interests of partitioners; sometimes, to report the facts, where a petition has been taken pro confesso but an account showing a balance against the respondent is essential; to examine the accounts of public officers; also, as to the satisfaction of judgments, as to the distribution of the proceeds of forfeited recognizances, of the proceeds of sales, etc. Or, a court may itself sit as a ” court of audit,” as, an orphans’ or surrogate’s court, in which at regular intervals large numbers of accounts are presented for approval. Where the claimants to a fund are numerous the auditor is required to give public notice of the time and place of holding hearings. His specific duties may be defined in the order of his appointment; but statutes provide for his issuing subpoenas, for administering oaths and affirmations, and for procuring the attachment of contumacious witnesses. He reports the facts, not the testimony, and a schedule by which ,the fimd may be distributed according to law. His rulings and recommendations are reviewable by the court upon exception filed by any aggrieved party. He is called upon to admit or reject items of costs, wages, rents, commissions, secured and unsecured Claims, etc. In every case the statutes, decisions, rules and practice of the particular jurisdiction should be consulted. Compare Master, 4.

Resources

Notes and References

1. Concept of Auditor provided by the Anderson Dictionary of Law (1889) (Dictionary of Law consisting of Judicial Definitions and Explanations of Words, Phrases and Maxims and an Exposition of the Principles of Law: Comprising a Dictionary and Compendium of American and English Jurisprudence; William C. Anderson; T. H. Flood and Company, Law Publishers, Chicago, United States)