Auditors work for governments, organizations and corporations. They are tasked with the responsibilities of gathering and analyzing financial records. Aspiring auditors are required to complete at least a Bachelor’s in Accounting degree. Many auditors pursue Master’s in Accounting degrees to enhance their chances of promotion and getting better salaries. Graduates are offered certification examination by the Institute of Internal Auditors.
Functions of an Auditor
Analyze Documents
One of the key roles of auditors is to review financial documents to ensure compliance with local and national regulations. Some of the documents that auditors review include financial information about assets, surplus, liabilities, income, expenses and stock. Auditors use the financial information of companies and organizations to create files and charts, and make the information accessible. These professionals also ensure that companies comply with government regulations and that taxes are paid on time.
Verify Effectiveness
Another key role of auditors is to verify effectiveness of organizations by looking for fraud or mismanagement. This may involve spending significant amounts of time interviewing managers and employees. During the interviews, auditors determine if the information provided in the interviews matches that in financial records. Auditors conduct these interviews to determine organizations’ profitability and financial stability. Auditors are expected to have strong interpersonal skills to communicate effectively with company personnel and get honest feedback.
Report Findings
Once an auditor has analyzed a company’s financial information and interviewed its employees, he/she is required to create detailed reports and discuss findings with executives and management. The reports contain recommendations on how the company can reduce waste and improve its balance sheets.
Types of Auditors
Internal
These types of auditors are hired by businesses to work for them, according to The Chronicle. Their role is to examine internal financial documents relating only to the business that hired them. Internal auditors help organizations and businesses to improve the accuracy of their financial information to avoid legal or financial problems. Basically, internal auditors are organizations’ quality controls for the organizations’ financial processes.
External
While internal auditors are useful, especially in large organizations, many businesses prefer to hire external auditors, because they are unbiased. Smaller organizations prefer hiring external auditors because they cannot afford to hire permanent internal auditors. The roles of external auditors are the same as that of internal auditors. However, many businesses hire external auditors only for specific projects. Most external auditors work for companies that specialize in selling auditing services to companies.
Government
These types of auditors are specialists in tax and disclosure regulations. Their job is to inspect businesses and individuals to determine if they follow laid down regulations. These professionals help clear up confusion regarding financial regulations and conduct investigations for government agencies.
Forensic
The job of forensic auditors is to investigate financial documents used to commit crimes. They specialize in crime and are mostly used by law enforcement agencies. Forensic auditors do not just scrutinize documents used to commit crimes but they also track money to find out where the money originated and where it ended up.
Related Resource: Environmental Accounting
Auditors play a crucial role in business oversight procedures. In many cases, businesses hire both internal and external auditors to ensure unbiased opinions. Many companies are required to audit their financial records on a yearly or quarterly basis.
