Does the auditor protect the owners?

To some degree.

Here is a letter that was published in Private Eye, one of Britain's most influential news magazines.

Wise monkey business
Sir;
You were wrong to claim that auditors are the first line of defence against corporate corruption."
("Shady Arabia and the Desert Fix", Eye 1375).

Aside from personal responsibility, which should not be overlooked in these days of "process" the directors of UK companies have a statutory duty to maintain an effective system of internal control. If corruption occurs, it points to a failure in fulfilling that obligation. It is the directors who should get it right. That is part of what they are paid to do.

If your more general point had been that too many audit failures had gone unpunished, you might find three quarters of members of the ICAEW (the Institute of Charter Accountants In England and Wales) would agree.
Andrew Smith BA FCA
Epping, Essex
Letters—Private Eye No. 1376

All of the protections that the auditor provides for the owners, that are proscribed in the Act sound so very reassuring. However, for several reasons, they do not adequately protect the owners and potential buyers.

First of all the board, not the owners, actually hires the auditor usually on the recommendation of the developer, the corporation lawyer or the property manager. The owners just ratify their selection. (The Act says the owners hire the auditor.)

Also the auditor makes his report based on general accepted accounting principles. The level of transparency required to meet the accounting profession’s acceptance of fair falls short of what most people would think of as a fair reflection of the actual financial state of the corporation.

A regular audit is not an accounting audit. The auditors may innocently miss important irregularities. The reason for that is because auditing is relying on sampling techniques. The auditors are not checking, and they are not required to check, every individual transaction.

Finally, because the owners unwittingly give their powers to interview, hire and set the remuneration for the auditor to the board, many auditors rightfully sees the management and the board as their de facto clients.

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