Job Profile Auditor

Keeping financial statements accurate and detailed is critical to keep business organizations running smoothly in today’s competitive economy. Fraudulent records can get businesses into a rat’s nest of financial, legal, and tax problems, especially if shareholders are involved. That’s where auditors come in. Auditors are highly trained investigators who pore over:

  • ledgers
  • expense reports
  • balance sheets
  • payroll
  • tax forms
  • other documents

They do this to ensure compliance with government regulations. Internal auditors are employed by an organization to check for mismanagement of funds and eliminate fraud. External auditors perform the same duties, but they work for a third-party firm to inform investors and authorities outside the company. Auditors play a vital role in ensuring the effectiveness of financial and operational reporting.

Salary

The Bureau of Labor Statistics reports that auditors in the United States earn a mean annual wage of $79,520, which is equivalent to $38.23 per hour. Auditors employed in local government make less at $69,180, but those working in the federal executive branch earn an average of 100,260. The highest-paid auditors can be found in the school and employee bus transportation industry–they earn a surprising $104,110 on average.

Beginning Salary

At the start of their career, auditors typically land in the bottom 10th percentile of earnings with a yearly income around $44,480. However, years of experience can help auditors eventually bring home upwards of $124,450 each year. The Institute of Internal Auditors states that becoming a Certified Internal Auditor (CIA) can increase earning potential by up to 40 percent!

Key Responsibilities

Auditors are primarily responsible for conducting financial analysis to provide assurance that records are free from significant errors. Auditors often report to the company’s management team to help prevent:

  • risk exposure
  • asset loss
  • theft
  • data manipulation

Typical daily duties include:

  • examining financial statements
  • inspecting account books for efficiency
  • creating internal control systems
  • evaluating operational processes
  • addressing fraud concerns
  • collaborating with other auditors
  • finding areas to eliminate monetary waste

Auditors check that all financial operations are complying with the latest local, state, and federal regulations. Auditors can work in various industries, including:

  • finance
  • manufacturing
  • insurance
  • healthcare

Necessary Skills

Being an auditor requires strong analytical skills to pinpoint issues in financial records and investigate fraudulent actions. Interpersonal skills are important for auditors to effectively communicate their findings to:

  • managers
  • clients
  • shareholders

Writing skills come in handy for creating well-written, detailed auditing reports. Auditors must be detail-oriented with good organizational skills to neatly comb through financial documentation. Basic mathematical skills are essential for auditors to analyze facts and figures on balance sheets. Auditors should have the ethical framework to quickly report issues and avoid pushing any company secrets under a rug. Technical skills are also important for auditors to utilize today’s cutting-edge auditing and statistical analysis software.

Degree and Education Requirements

Before working as an internal or external auditor, you’ll need to earn at least a four-year bachelor’s degree from an accredited post-secondary institution. Most auditors pursue an undergraduate major in:

  • accounting
  • finance
  • business administration
  • statistics

Some select U.S. universities offer a bachelor’s degree in internal auditing. Attending graduate school will greatly expand an auditor’s room for advancement into management. For instance, the job of the internal audit director is generally reserved for candidates with a Master of Accounting (MAcc) or Master of Business Administration (MBA) degree.

You should take courses in:

  • fraud examination
  • advanced auditing
  • information assurance
  • financial reporting
  • business law
  • cost accounting

Pros and Cons of the Position

Like other jobs, becoming an auditor will provide both advantages and drawbacks. On the positive side, auditors have the freedom to specialize in several different areas, such as:

  • information technology
  • environment
  • government compliance
  • operations control

Auditing jobs provide a high average salary with standard benefits. Fast job growth means auditors have ample opportunities to get their foot in the door. Auditors also have the intrinsic reward of helping companies stay:

  • fair
  • honest
  • accountable

However, auditors have a high level of responsibility that can lead to stress. Auditors have a typical office desk job with lots of computer time and little physical activity. Most auditors work beyond the 40-hour week with overtime, especially around tax season. Poring over financial statements can become repetitive and boring to some. Auditors must also invest significantly in their:

  • schooling
  • certification
  • continuing education

Getting Started

Gaining the right experience on your resume is important to become an auditor. Most employers will prefer entry-level auditing job candidates to have at least one year of experience. It’s best to complete an internship, practicum, or co-op experience while earning your degree. Working part-time as a bookkeeper or accounting clerk could also help. Then, you can rise through the organization to become an internal auditor. Decorating your professional career with certification will aid in your advancement options. Through the Institute of Internal Auditors (IIA), you can become a:

  • Certified Internal Auditor (CIA)
  • Certified Financial Services Auditor (CFSA)
  • Certified Government Auditing Professional (CGAP)

Some may want to become a Certified Information Systems Auditor (CISA) through the ISACA. This requires:

  • having a bachelor’s degree
  • passing an exam
  • having five years of experience auditing information systems

Auditors could also benefit from becoming Certified Fraud Examiners (CFE).

Future Outlook

The globalization of our country’s growing economy will likely lead to strong demand for auditors. There will be more auditors hired to carefully examine the legally required financial records in accordance with increasingly complex tax and regulatory standards. Tighter lending regulations placed on financial institutions will make audits even more important. The Sarbanes-Oxley Act also requires public companies to formalize their internal control practices.  The BLS predicts that the employment of auditors will expand by six percent through 2028. Auditors will have favorable prospects at:

  • accounting firms
  • government agencies
  • financial institutions
  • insurance carriers
  • manufacturing companies
  • corporations

Overall, auditors dig into the inner workings of an organization to dissect operational and financial reporting processes. Auditors render their professional opinion on whether company statements are presented correctly and fairly without material misstatement. Both internal and external auditing are crucial for giving executives, investors, lenders, and government agencies confidence that the company is operating soundly. If you become an auditor, you’ll use your financial expertise to improve an organization’s accuracy and eliminate inefficiency.

 

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