Accountants and auditors follow companies’ money, ensuring a business accurately and truthfully records and reports its financial operations. Accountants handle the day-to-day recording, analysis and reporting of an organization’s financial transactions. Those transactions include the recording of income, payments, payroll and tax deductions as well as the annual reconciliation of the company’s books. Auditors are generally highly trained accountants who carefully examine a company’s financial records for accuracy and review a company’s accounting methods and procedures to ensure that the company avoids fraud and theft. Auditors require training “not only in all types of accounting practices, but also in various tax laws and financial regulations” (eHow).
According to The Houston Chronicle, “Auditors typically have a bachelor’s degree in accounting or finance” and may be certified public accountants (CPAs). Every accountant filing a report with the Securities and Exchange Commission (SEC) is required by law to be a CPA. Many auditors choose to earn additional professional certifications, such as the certified internal auditor, certified in control self-assessment auditor, certified information systems auditor and certified government auditing professional. Other auditors go on to earn an MBA in accounting, often specializing in services such as assurance and risk management, or in certain industries such as manufacturing, healthcare, pharmaceuticals or law enforcement. Some professionals with backgrounds in accounting and auditing teach at colleges and universities. There are several types of auditors, each with different duties and responsibilities.
Internal auditors work for the companies they audit. At large corporations, internal auditors work in accounting departments, where they double-check staff accountants’ work. The primary duties of an internal auditor are to review and assess a company’s policies, procedures and records and to review and assess a company’s performance based on its plans, policies and procedures. The duties of an internal auditor include reviewing financial records and accounting systems, reviewing compliance with company policies, and evaluating the efficiency of company operations. Their duties may also include reviewing employee performance and assessing progress toward company goals. Internal auditors typically report to the board of directors’ audit committee.
Richard Chambers, president and chief executive officer of The Institute of Internal Auditors, says that internal audit is a critical component of an organization’s divigation system, much like the divigation system of a vehicle. Chambers says internal audit demonstrates its value by “providing assurance that the organization is progressing on the course charted by management and the board,” providing corrective recommendations, and identifying and alerting management and the board of compliance risks and failures. The “strong and competent oversight of governance, risk and compliance issues” by internal auditors, Chambers says, “is a powerful and useful tool for management and directors that can help improve efficiency and effectiveness, boost profit and competitiveness, and provide transparency and assurance to investors.”
External auditors share some of the duties of an internal auditor, but they do not work directly for the organizations they audit. They review a company’s financial statements and inform management, the board, investors and authorities whether the statements accurately reflect the current financial situation of the company, and they determine if those statements have been correctly prepared and reported. External auditors often work on a project-by-project basis.
Government auditors maintain and review the records and practices of government agencies and audit private businesses and individuals whose transactions are subject to government regulation or taxation.
Forensic auditors examine and evaluate firms’ or individuals’ financial documents for use as evidence in court cases involving fraud, embezzlement or other financial claims. Forensic auditors often provide expert testimony during trial proceedings.
Procurement review auditors analyze a company’s purchasing practices, processes and systems, determining whether the company really needs the goods and services they buy. Procurement review auditors can help a business save money and run more efficiently.
Information technology auditors focus on the security and controls of an organization’s computer systems to ensure that the financial data come from a reliable source. According to the U.S. Bureau of Labor Statistics (BLS), nearly all IT auditors are internal auditors.
Job Outlook for Auditors
Employment of auditors and accountants is projected to grow 11 percent by 2024, which is higher than the average for all occupations, according to the BLS. Accountants and auditors held about 1.3 million jobs in 2014 and made a median annual wage of $65,940 in May 2014. Accountants and auditors who have earned CPA designation and have an MBA usually enjoy the best job prospects, according to the BLS.
Learn about the UWF online MBA in Accounting program.
Have a question or concern about this article? Please contact us.