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An auditing career requires both keen investigative skills and a high competency in financial analysis. As an auditor, it’s up to you to make sure your organization complies with tax laws and follows all financial regulations.
Auditing is a rewarding and well-regarded career, whether you are a member of an in-house accounting team or you work with a variety of clients. If you’re intrigued by a career in auditing, here’s all you need to know about stepping into the position.
What Does an Auditor Do?
An auditor is an accountant who ensures an organization’s financial records are accurate. Where a tax accountant may prepare financial statements for a client or an organization, an auditor examines balance sheets, income statements and other documents for errors and violations.
After completing a thorough investigation, whether as part of a routine or as a one-time auditing event, an auditor creates a report for stakeholders to review. This report lists any areas where the company is out of compliance, along with recommendations for solutions. Common errors include missed tax payments and miscalculations on a balance sheet.
Auditors must be detail-oriented and enjoy problem-solving. It’s also important for an auditor to have a high ethical standard due to the nature of their work.
Though many auditors are external, it’s not uncommon for companies to employ in-house auditors to prevent any financial missteps or irregularities in their reports and taxes. Auditors are also responsible for noting where an organization can improve its financial processes, become more efficient and decrease risk.
Where Does an Auditor Work?
An auditor works either as part of an organization’s internal accounting team or as an outside investigator. External auditors often need to travel to their clients’ office locations to perform their auditing duties in person.
All auditors work in office environments unless there is a need for an inventory count. In these cases, an auditor counts an organization’s inventory—be it office supplies, livestock, furniture or any other type of product—to ensure the company’s physical assets match its financial statements.
Types of Auditor Careers
As noted earlier, not all auditors perform the same duties. In fact, auditing in and of itself can be quite a diverse career. Take some time to explore the different specialties you can pursue within a career in auditing.
Note that while the U.S. Bureau of Labor Statistics (BLS) does not break down projection data among the various types of auditors, the BLS projects jobs for all accountants and auditors to grow by 7% from 2020 to 2030.
Internal Auditor
Education Needed: An entry-level internal auditor position requires a bachelor’s degree in accounting or a similar field.
Salary: An internal auditor can expect to earn about $101,000 per year.
An internal auditor works for only one company or organization. They are responsible for ensuring that the company follows all tax laws and industry regulations.
Auditors who work for one organization take on additional responsibilities such as overseeing tax return and financial statement preparation, financial analysis and reporting and updating accounting procedures. Internal auditors are valuable assets because they can help companies reduce risk and become more efficient over time.
External Auditor
Education Needed: An external auditor position often requires a bachelor’s degree in accounting or a related field.
Salary: An external auditor can expect to earn about $100,000 per year.
An external auditor performs similar duties as an internal auditor, but they are not employed by any particular organization. Instead, an external auditor serves as an independent consultant who can review an organization’s financial records from an outside perspective.
An external auditor must remain impartial to provide accurate reports and identify any irregularities or areas where organizations are not following regulations. Many external auditors work for accounting firms, the IRS or different government organizations.
Information Technology Auditor
Education Needed: An information technology auditor must hold a bachelor’s degree in accounting, computer science or a similar field.
Salary: An information technology auditor can expect to earn about $72,000 per year.
As the name suggests, an information technology auditor serves as the go-between for an organization’s IT department and accounting team. Information technology auditors ensure that the technology used by accountants to create financial statements, tax returns and reports operates at optimal capacity and produces accurate reports.
Another common function of an information technology auditor is assessing an organization’s computer systems for any external security risks. Given the rise in technological advances, this position requires a high level of competency in both data analysis and computer systems.
Forensic Auditor
Education Needed: A forensic auditor must hold a bachelor’s degree in accounting or a related field.
Salary: A forensic auditor can expect to earn about $70,000 per year.
One of the most interesting careers in auditing is that of a forensic auditor. A forensic auditor needs to have in-depth knowledge of all relevant laws, procedures and regulations to determine whether an organization is taking part in illegal activity. Forensic auditors comb through an organization’s financial statements in search of fraud, misreporting, embezzlement and similar activity.
Forensic auditors commonly testify in court and work alongside law enforcement. Forensic auditors can work for large organizations, government entities or insurance companies.
Auditor Certifications
An auditor certification is a great way to set yourself apart as an expert in the field and to increase your earning potential. In fact, some auditing and accounting firms require employees to be certified public accountants.
Two major professional certifications exist for auditors: Certified Internal Auditor (CIA)® and Certified Information Systems Auditor (CISA)®.
CIA Certification
If your goal is to become a senior internal auditor or manager, consider adding a Certified Internal Auditor certification to your repertoire. This certification is administered by the Institute of Internal Auditors to demonstrate that you have the advanced auditing skills required to evaluate an organization’s financial records and create accurate risk assessments.
It costs a minimum of $850 to both prepare for and take the exam. You must also have a master’s degree, bachelor’s degree or five years of experience in the field. Each year your certification is active, you are responsible for accumulating 40 continuing education credits.
CISA Certification
Before becoming a Certified Information Systems Auditor, you need at least five years of experience working as an information technology auditor or in a related field. A CISA must have extensive knowledge in computer systems, security and, of course, auditing.
Individuals can become a CISA through the Information Systems Audit and Control Association (ISACA) To maintain certification, ISACA requires members to complete 120 continuing education credits over three years.
