What is Auditability?

Auditability refers to the ability of an auditor to achieve a comprehensive examination of the financial records and financial statements of a client. If certain conditions are not present, then it is much more difficult for an auditor to complete an audit engagement; this may result in substantially more time being spent to complete an engagement. If the auditability of a client is quite poor, then the auditor may elect to issue a qualified audit opinion, rather than the usual unqualified opinion. Or, in the worst cases, the auditor may elect to terminate its audit engagement with the client.

Criteria for Auditability

An audit engagement has a higher level of auditability when the client’s financial records are well-organized and complete. Further, the client’s personnel should be transparent in their dealings with the auditor, and the client should have a good system of internal control.