Standards of auditing provide that in the process of audit verification, the auditor must come to reliable knowledge of the identified facts. National audit standards state that certainty is the full proof of a fact.
All final conclusions of the auditor should be verified by a system of credentials. According to some experts, the quality of evidence is determined by:
1) proximity to a real event;
2) the establishment of a causal correspondence between fact and evidence;
3) the reliability of sources. This is also the basis for internal auditing standards.
In accordance with the first paragraph, three main classes of evidence apply: natural, artificial, and rational argumentation. Auditing standards provide that the basis of the division is the facts on which the statement is based. Unfortunately, existing legal norms and established traditional standards of audit activity do not fully regulate the question of what the auditor should do if, under an agreement concluded with the board of directors, he has established the assignment of a certain amount of money by the manager or chief accountant of the company. It seems that, first of all, he is obliged to notify the directors of this, who, in turn, must bring the facts to the attention, depending on the size of the theft, the meeting of shareholders, since the auditor, according to the law, must inform the founders about the violation of the law.
If the auditor during the audit finds that part of the board or the executive director is liable for actions or omissions that, as a rule, entail liability for damages, or that part of the board or executive director acted in violation of the law, he should note this in the report . The auditor also faces a problem - whether to report abuse to the investigating authorities. It is important to keep in mind who owns the enterprise or firm.
If the enterprise is state-owned, then in accordance with the article of the Criminal Code this is “failure to report on ... a serious crime”. Modern standards of audit activity establish the principle that if during the verification of all circumstances of calculations with the budget, the auditor has established an understatement of payments to the budget, then he should help the accountant of the company to make a tax calculation and recommend making the appropriate changes to the balance sheet. It should not be reported to the tax service, because this contradicts the status of audit activity as a system of independence of financial control. The activities of the auditor do not imply customer liability insurance, since this is the business of insurance organizations. For all the significance reflected in the normative acts of indicators, they were clearly not enough for an objective, reliable assessment of economic insolvency during the audit.
The solvency of a modern market enterprise cannot be characterized only by the current liquidity of its assets and cannot serve as a basis for suspicion of fraud. Therefore, such violations can only be an intermediate characteristic of the state of the finances of an enterprise or other audited resources. Through the implementation of effective measures by the enterprise, its reputation can be restored without a particularly tangible impact on its solvency and financial stability in general.
Thus, the audit should not serve as an instrument for establishing and assuming illegal actions, this is not its function and it is simply unlawful to do this with the help of a financial audit.