top of page

Career as an Auditor

Updated: Jun 1, 2020



WHO IS AN AUDITOR?

Auditors are specialists who review the accounts of companies and

organisations to ensure the validity and legality of their financial records. They

can also act in an advisory role to recommend possible risk aversion measures

and cost savings that could be made. An auditor, for the purpose of accounting,

is a person whose job it is to make sure that information reported on financial

statements is true and accurate and that the financial statements are prepared

according to GAAP principles. They protect businesses from fraud, point out

discrepancies in accounting methods and, on occasion, work on a consultancy

basis, helping organizations to spot ways to boost operational efficiency. Auditors

work in various capacities within different industries.


WHAT DOES AN AUDITOR DO?

In addition to examining and preparing financial documentation and written reports, auditors must explain their findings. This includes face-to-face meetings with organization managers and individual clients.


An auditor typically does the following:

  • Examines financial statements for accuracy

  • Examines financial statements for compliance with laws and regulations

  • Computes taxes owed, prepares tax returns

  • Make sure taxes are paid properly and on time

  • Inspects account books and accounting systems for efficiency

  • Organizes and maintains financial records

  • Makes best-practices recommendations to management

  • Suggests ways to reduce costs, enhance revenues, and improve profits

Many auditors specialize, depending on the particular organization that they work

for. Some specialize in assurance services (improving the quality or context of

information for decision makers) or risk management (determining the probability of a misstatement on financial documentation). Other auditors specialize in specific industries, such as healthcare. Some workers with a background in accounting and auditing teach in colleges and universities.


In public companies, internal auditors are under the direction of the audit

committee of the board of directors. This lends the audit committee full


independence from the company’s management team, allowing them to report on operational issues as necessary.



TYPES OF AUDITOR

The four main types of auditors are:


1.Public Auditors

Public auditors do a broad range of accounting, auditing, tax, and consulting tasks. Their clients include corporations, governments, and individuals.


They work with financial documents that clients are required by law to disclose.

These include tax forms and balance sheet statements that corporations must

provide potential investors. For example, some public auditors concentrate on tax

matters, advising corporations about the tax advantages of certain business

decisions or preparing individual income tax returns. They review clients' financial statements and inform investors and authorities that the statements have been correctly prepared and reported.


Some public auditors specialize in forensic accounting or investigating financial

crimes, such as securities fraud and embezzlement, bankruptcies and contract

disputes, and other complex and possibly criminal financial transactions.


2.Forensic Auditors

Forensic auditors combine their knowledge of accounting and finance with law and investigative techniques to determine if an activity is illegal. Many forensic auditors work closely with law enforcement personnel and lawyers during investigations and often appear as expert witnesses during trials.


Government auditors maintain and examine the records of government agencies

and audit private businesses and individuals whose activities are subject to

government regulations or taxation. Auditors employed by federal, state, and local

governments ensure that revenues are received and spent in accordance with

laws and regulations.


3.Internal Auditors

Internal auditors check for mismanagement of an organization’s funds. They

identify ways to improve the processes for finding and eliminating waste and fraud.


4.External Auditors

External auditors are independent auditors that do not work for the company they are auditing. Investors, government agencies and general public companies rely on this type of auditor to present an unbiased and independent report.


5.Information Technology Auditors

Information technology auditors are internal auditors who review controls for their

organizations computer systems, to ensure that the financial data comes from a reliable source.


KNOWLEDGE AREAS NEED TO ACQUIRE FOR BEING An AUDITOR

  1. Communication skills, including oral communication, report writing, and presentation skills

  2. Problem-solving skills (i.e., conceptual and analytical thinking)

  3. Ability to promote the value of internal audit among key employees within the organization

  4. Keeping abreast with regulatory changes and industry standards

  5. Knowledge in auditing, internal audit standards, fraud awareness, and professional ethical standards.

  6. Knowledge in enterprise risk management (i.e., risk analysis and control assessment)

WORK VALUES

Core values which must be possessed by an auditor:

1. INDEPENDENCE

Internal auditors must have an impartial, unbiased attitude and avoid

conflict of interest.

2. OBJECTIVITY

Objectivity is an unbiased mental attitude that allows internal auditors to perform engagements in such a manner that no quality compromises are made. Objectivity requires that internal auditors do not subordinate their

judgment on audit matters to others. Threats to objectivity must be managed at all levels.

3. PROFICIENCY

Internal auditors must possess the knowledge, skills, and other competencies needed to perform their responsibilities.

4. DUE PROFESSIONAL CARE

Internal auditors must apply the care and skill expected of a reasonably prudent and competent internal auditor.

5. CONTINUING PROFESSIONAL DEVELOPMENT

Internal auditors must enhance their knowledge, skills, and other competencies through continuing professional development.


EDUCATION

A bachelor's or master's degree in accounting, business, finance or a related field is required for any level of an External Auditor. Most public accounting firms require a valid state-issued Certified Public Accountant (CPA) license or the educational qualifications necessary to obtain one upon hiring. Auditors check financial books. They analyse accounts and guide organizations on the best accounting practices. Most employers require auditors to have at least a bachelor's degree.


How to become one: Most employers require a candidate to have a bachelor's degree in accounting or a related field. Certification within a specific field of accounting improves job prospects. For example, many accountants become Certified Public Accountants.


Salary: The median annual wage for accountants and auditors is $70,500.


Job Outlook: Employment of accountants and auditors is projected to grow 6 percent over the next ten years, about as fast as the average for all occupations.


In general, employment growth of accountants and auditors is expected to be closely tied to the health of the overall economy. As the economy grows, more workers should be needed to prepare and examine financial records.


Related Careers: Compare the job duties, education, job growth, and pay of accountants and auditors with similar occupations.


To become an auditor, a person must have at least a bachelor's degree with a major in accounting. Courses in economics, communications, computers, and the humanities are also helpful. Many external auditors receive advanced degrees, such as a master's degree in business administration (MBA) or a law degree.


Many public accounting firms require their external auditors to pass their state's certification examination and earn a Certified Public Accountant (CPA) designation. All states use the four-part Uniform CPA Examination issued by the American Institute of Certified Public Accountants (AICPA). The exam lasts for two days and typically has a pass rate of only 25 percent. Before candidates can take the exam, most states require that they have 150 hours of college-level course-work, which is the equivalent of a master's degree and an undergraduate degree.


JOB OUTCOMES

The best way to get started in this field is in a public accounting firm. After individuals have gained some experience in general accounting, they can begin to specialize in auditing. Candidates can find out about job openings from accounting firms, Internet job banks, and from classified ads in newspapers. State and private employment offices may also offer job leads.


Working Conditions

Auditors travel often and do much of their work in the offices of their clients and in banks and other financial organizations. They often come into contact with people. They usually work between thirty-five and forty hours during a five-day week. However, they may be expected to work overtime without additional pay.


Earnings and Benefits

Accountants and auditors in general earned a median annual salary of $50,770 in 2004, according to the Bureau of Labour Statistics. Salary.com estimated that mid-level internal auditors made a median annual salary of $54,445 in 2006. Entry-level auditors made much less. A 2005 salary survey conducted by staffing services firm Robert Half International revealed that accountants and auditors with one year of experience earned between $28,250 and $45,000 per year. Auditors usually receive paid holidays and vacations, health and life insurance, and pension plans. Some employers also offer profit-sharing plans. Self-employed auditors arrange for their own benefits.


DETAILED WORK ACTIVITIES AND RESPONSIBILITIES:

The auditor's responsibility is to express an opinion on whether management has fairly presented the information in the financial statements. To do so, the auditor collects evidence to obtain reasonable assurance that the accounts are free of material misstatements.

  • Ensures compliance with established internal control procedures by examining records, reports, operating practices, and documentation.

  • Verifies assets and liabilities by comparing items to documentation.

  • Completes audit workpapers by documenting audit tests and findings.

  • Appraises adequacy of internal control systems by completing audit questionnaires.

  • Maintains internal control systems by updating audit programs and questionnaires; recommending new policies and procedures.

  • Communicates audit findings by preparing a final report; discussing findings with auditees.

  • Complies with federal, state, and local security legal requirements by studying existing and new security legislation; enforcing adherence to requirements; advising management on needed actions.

  • Prepares special audit and control reports by collecting, analysing, and summarizing operating information and trends.

  • Maintains professional and technical knowledge by attending educational workshops; reviewing professional publications; establishing personal networks; participating in professional societies.

FREQUENTLY ASKED QUESTIONS


WHAT IS SOME GOOD ADVICE FOR AUDITOR?

  • Stay calm. New staff members often put immense pressure on themselves. ...

  • Show up on time with a smile

  • Be conscientious.

  • Know your limits.

  • Organize client communications.

  • Get clarification upfront.

  • Enjoy the experience.

WHAT IS IT LIKE BEING AN AUDITOR?

As an auditor, you will get a lot of respect from the client. Client will try their level best to be kind and pleasant to you. If you are the lead auditor, your advice and decisions matter the most to client. You will gain a lot of knowledge about how different companies operate and their secret of success.


HOW DIFFICULT IS IT TO BE AN AUDITOR?

Auditing in and of itself is not difficult. Once you have a decent knowledge base and become adept at using excel, you can tackle almost anything that gets assigned to you. For me, the hard part about auditing was maintaining focus.


IS IT WORTH BEING AN AUDITOR?

It's a job in high demand.

As long as there is business to be done, there will be a job for auditors. Experts say the number of jobs for accountants and auditors will grow 11 percent from 2014 to 2024, faster than the average for many other occupations


SHOULD I BECOME AN AUDITOR?

Auditors involved in assurance work use their specialised industry and financial knowledge and analytical techniques to get an in-depth understanding of organisations and how they function.

They then use this understanding to give them advice to help them thrive in their particular marketplace, now and in the future.


WHAT ARE THE BEST SCHOOLS AND COLLEGES FOR BEING AN AUDITOR?

Auditing programs are available at some of the nation's highest ranked schools. These programs are available at the undergraduate and graduate degree levels.


Students who are interested in becoming professional auditors can find relevant programs at several institutions, including Bradley University, Eastern Michigan University, DePaul University, and CUNY Bernard M. Baruch College.

Three of these schools were ranked highly by U.S. News and World Report, and Eastern


COLLEGES

University of Washington Seattle Campus

Pace University, New York

CUNY Bernard MBaruch College

Colorado State University –Fort Collins

Carlow University


YOUTUBE LINKS FURTHER REFERENCES:


bottom of page