Careers in auditing are dynamic and esteemed, whether within an organization's internal team or as an external consultant serving various clients. There are multiple types of careers in auditing across different sectors:
Internal Auditors:
Internal auditors work for businesses, evaluating operational and financial processes, including corporate governance, and reporting their findings to senior management.
The internal auditing process typically involves three key tasks:
They assess risks and internal controls within the company.
They ensure compliance with federal and state laws and regulations.
They make recommendations to address failed audits or identified issues.
Internal auditors undertake various tasks, such as examining financial statements, expense reports, inventory, and financial data, to accomplish these objectives. They also interview employees, supervise work schedules, verify physical assets, and scrutinize financial statements to detect errors or discrepancies and enhance productivity.
After the examination, internal auditors present their findings in a formal report to senior executives. The report outlines the audit process, discoveries, and suggestions for improvements. If changes are recommended, internal auditors may conduct follow-up audits to assess the implementation of the recommended changes.
Benefits of Hiring an Internal Auditor (IA)
Despite having no legal obligation, many companies opt to employ internal auditors due to the numerous benefits they offer. Robust internal audits facilitate swift issue resolution, maintain a favorable reputation, and prevent financial waste.
Internal audit reports aid companies in thriving and operating at peak efficiency. Additionally, internal auditors prepare companies for annual external audits by addressing issues beforehand. Thus, executives consider internal auditors a necessary investment in ensuring organizational success and compliance.
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External Auditors:
An external auditor is a certified public accountant that the company does not internally appoint. He is an independent entity conducting audits, reviews, and other financial assessments for clients. As he is an independent entity unrelated to the company, the evaluation of an external auditor is perceived as impartial and free of bias. Therefore, their opinions are highly valued by investors and creditors seeking unbiased appraisals of organizations' financial health.
Their certification usually includes minimum training, experience, and passing rigorous examinations. They must also fulfill ongoing professional education requirements to maintain certification. This certification trains them to fulfill their professional obligations and serves as a credibility check for their opinions and evaluations.
Key Duties of External Auditors:
Planning the Audit:
One of the primary tasks of an external auditor is to plan out their audit procedure. An extensive audit procedure must thoroughly evaluate various parts of an organization's financials to discover any material misstatement and bring forward inaccurate information.
Performing audit procedures:
Performing audit procedures is the most crucial step, as this is where the actual audit happens. While performing the audit, auditors must stick to their plan. However, auditors must show flexibility in considering their findings in the event of some unpredicted revelations.
Evaluating audit results:
After performing all the auditing procedures and collecting relevant data, auditors use the information gathered to form their professional opinion. To do so, they perform various tasks, like:
Testing Controls
Assessing Financial Statements
Determining Material Misstatements.
Communicating Audit Results:
Once the audit is completed, the auditor will provide a detailed report. This report ensures a clear understanding of audit findings for informed decision-making.
Documenting the Audit:
Their governing bodies require all external auditors to meticulously record their audit processes, findings, and recommendations. These governing bodies also determine the period for which the record must be kept. These records are used to support their professional opinion and as a reference point in subsequent audits.
Forensic Auditors:
A forensic audit is conducted to gather evidence related to financial fraud. Such evidence is generally used in court during legal proceedings. This specialized area falls within the realm of accounting and is typically managed by dedicated forensic auditing teams in large accounting firms.
Conducting such audits demands a blend of accounting proficiency and legal understanding. However, in some instances, forensic auditors may also be engaged to perform audits of situations that are not fraud-related, requiring a high level of expertise and a keen eye to discover any material misstatement and bring forward inaccurate information.
Other Auditors:
This category may include specialized careers in auditing, such as government auditors, information technology (IT), environmental auditors, or compliance auditors, focusing on specific areas of concern within organizations.
