Follow
What is an auditor doing when he/she goes off to work each day? Accounting professionals who are charged with reviewing a business’ finances and procedures for accuracy, integrity and efficiency, auditors spend their working hours using their professional skills to conduct audits to verify that a business is actually functioning as reported. In doing so, they protect the interests of the business, its owners, its investors and its employees.
Auditing for Accuracy
An examination of a company’s financial data, systems, services, products and employees is called an audit. Auditors conduct these reviews to verify that the information a business is gathering and the methods it uses to collect it are actually providing an accurate picture of the company’s assets and liabilities. Audits also help determine that the business has appropriate financial controls, that it is managing risk properly, and that it is in complying with all financial law and regulations.
Auditing Inside and Out
When it comes to auditors, there are two basic kinds: internal auditors and external auditors. While both types review a company’s records and procedures for accuracy, they do so with different responsibilities and objectives. Company employees or consultants acting as employees, internal auditors assess the reliability of the business’ current risk management policies, confirm that these policies are being followed correctly, and make suggestions for improvements or updates to policies or procedures. They report their findings to the company’s management team. In contrast, external auditors are not employees of the company. Instead, they are employees of an auditing firm or outside consultants who are tasked with verifying that the business’ financial records are reliable. After evaluating the business’ financial records and its management of financial risks, external auditors report to the company’s owners.
Qualities Successful Auditors Need
Since auditors police a company’s financial reporting, it is unsurprising that Investopedia lists a strong sense of ethics among the qualities that auditors need to succeed. Auditors must be willing to face potentially embarrassing or uncomfortable situations when necessary to find the truth. A healthy sense of professional skepticism is also a plus. Just as a security expert must be able to think like a criminal to pinpoint potential weaknesses and defend against attacks, an auditor must be able to look for loopholes that would allow someone intent on manipulating a business’ controls to do so. This makes them more effective at identifying evidence of fraud or other misbehaviors. It also allows them to spot weak areas in a business’ policies so that corrections can be made. Strong interpersonal skills are also a necessity for auditors. They need to be able to communicate clearly and effectively with their coworkers and clients so that they can request the information they need, handle any resistance they encounter diplomatically, and present their findings in a manner that is useful and easily understood.
Qualifications Required to Work as an Auditor
While a bachelor’s degree in accounting, economics, business or finance may be enough for entry into the professional world of auditing, most auditors have a master’s degree. Many will also hold one or more professional certifications. The certified public accountant credential is perhaps the best known of these certifications, but several options are available. Individuals interested in careers as auditors can also qualify for the certified internal auditor, the certified fraud examiner and the certified information systems auditor credentials.
Related Resource: Financial Examiner
The U.S. Bureau of Labor Statistics expects that financial scandals and tighter lending standards will trigger an increased demand for the services of qualified auditors and accountants over the next decade; it predicts the field will see a 13 percent growth in jobs between 2012 and 2022. While the public may sometimes wonder what an auditor is responsible for, members of the business community know that these trusted accounting professionals play a critical role in ensuring that the management and owners of a business are able to make decisions based on reliable financial data.
