Auditors perform many of the same functions that bookkeepers and CPAs perform, but they do it in an advisory capacity. The auditor is the one who evaluates the financial statements in order to form an opinion on whether or not the case is error-free. However, you will most likely be working within a company’s ranks, or several companies if you so choose.
What Do Auditors Work On?
One thing will stay the same. The general practice of the audit is to evaluate a company’s financial statements and determine whether the person involved is competent and if the records are sufficient. You are looking to establish evidence of relevance and reliability.
Relevance refers to the evidence of set facts you are verifying. Reliability is when you depend on the evidence to find the answer. GAAP refers to generally accepted accounting principles, and you must determine when GAAP standards are not being followed and inform the client of such.
Auditors will also work with occurrence, which are transactions that took place, completeness, an event recorded wholly, classification, information delivered to the proper account, cutoff, the correct period of the transaction, and rights and obligations, which is the issue or what rights and liabilities exist. Auditors are in charge of reconciling accounts, adjusting entries and preparing financial statements.
Where Do They Work?
Auditors have knowledge beyond bookkeepers, which is sometimes all a company can afford. Therefore, auditors are called upon to carry out more complex assignments for smaller companies, and in the end, this saves on cost and promotes efficiency.
You might even want to get comfortable with your independence, since more emphasis has been put on auditors to be objective, coming from the American Institute of CPAs and other government organizations. New regulations actually restrict non-attest services that are often bundled up with auditing, such as tax services.
Most of your time will be reviewing financial statements and ensuring all items are in accordance with laws and standard financial reporting framework. You must gather evidence and compare this information so that you can be reasonably sure that all statements are free of duplicity, misstatement and error. You are not only investigating cases of fraud, but sometimes simple human error which cannot be classified in the same way as intentional fraud.
Auditors may also be hired, by management, to gain an understanding of how a company is operating. While it’s not always common, auditors can sometimes offer advice on how to improve financial reporting and even how to maximize a company’s performance and efficiency.
Beyond the Job Description
Auditors are not responsible for any company’s financial work, only what they audit. The responsibility is to the company, which has no influence over the auditor. These professionals are not management, and thus cannot perform any transactions, make changes to source documents, assume custody over accounts, or monitor ongoing activities for a client.
Neither can an auditor approach someone outside of proper jurisdiction, such as the board of directors. The auditor is also not going to be reconciling any checking accounts or finding invoices. This is beyond the job description.
This is a lucrative career that will still allow you your independence. Why not start looking into higher educational opportunities in accounting?