In the 10th century in England the first audit was documented: the Treasury was sorting out the monarchy’s accounts. Ever since people began to report expenses and profits, there has been a need for independent specialists who can verify their accuracy. Today, businesses bring in auditors to understand the finances and accounting and compare the data in the papers to the real numbers. People from third-party specialized organizations do this work without causing a conflict of interest, and their conclusions are trusted by state agencies and counterparties.
The auditing consists of four stages:
- Planning. The first step is getting to know the company’s business processes and financial controls. Auditors identify weaknesses where mistakes or collusion are most likely. Based on this data, an audit strategy is developed.
- Intermediate procedures. Preliminary tests of documents are now conducted and inquiries are sent to counterparties.
- Final Procedures. At this stage, basic paper checks and analytical procedures take place.
- Release of the conclusion. In the final stage, the client gives the financial statements to the auditors, and they compare them with the figures they received during the research. They then issue a written opinion reflecting the findings.
The root of the word “audit” comes from the Latin “audio”, “to hear.” The root of the word “audit” comes from the Latin audio – “to hear”. This is the job of the auditor – to “listen” to the company in order to find out what and how it was doing during the reporting period. Then relate it to what it reported.
Skills for auditors
To master the profession, the following hard skills are useful:
- Knowledge of standards. International and national financial accounting and reporting rules are the auditors’ bible.
- Analytical skills. A quality audit will require learning about the company, market and industry, and then correctly interpreting that data into numbers.
- Ability to write reports and presentations. You must be able to express yourself correctly in legal language, to structure and format information.
Knowledge of standards is a prerequisite to working in the profession. It is necessary to keep track of their changes and be able to search for relevant information. Auditing companies constantly conduct training and testing on these issues.
Soft skills that will help build a career:
- Management skills. Learning how to manage a team, properly plan workloads, and train people is important to grow in the profession.
- Negotiation skills. Disagreements between auditors and the client are commonplace. You need to learn to come to solutions that will suit everyone and remain within the law.
Advantages and disadvantages
The profession has its pros:
- Demand. Almost all companies need audit services, so there is a great demand for specialists in this area.
- New impressions. Auditors are constantly changing environment: they visit the offices of their company, its partners and clients, and travel a lot around the country and the world.
- Opportunity to work remotely. Many organizations offer auditors the opportunity to perform part or all of their tasks off-site.
Cons of audit work:
- Confidentiality. Some projects may contain commercial or state secrets. You can’t tell others about them.
- Scrupulousness. To do an audit is to dive into the world of numbers and reports. You have to spend a lot of time proofreading documents.
- Departures. The flip side of constant business trips is that you often have a trip to not the most picturesque places, and the frequent change of time zones negatively affects your health.
Auditors spend up to several months as interns. Then they become specialists and grow to the position of consultant and then a senior manager. This can take up to three years. With each next step tasks change: instead of checking specific documents, more and more you have to manage the team, summarize its work and build communications with clients and partners.
For 10 years in the profession, you can become a partner. That is how auditing companies call a position similar in responsibilities to the CEO. It is the key person in the corporation who enters into contracts, develops customer relationships, and is responsible for developing the methodology.
Author’s Bio: Jean Hartley is a professional content writer who has helped students for over 6 years. She successfully works for the essay writing services and also manages remote projects. Jean has her own blog on YouTube where she shares her knowledge.