What does auditor do? That is the question…that hardly bothers an entrepreneur until he launches his own business and stumbles upon tax issues. The tax assessment is the thing such businessman is always concerned about, especially when he is an owner of a small organization. What we get are competing interests of the country and self-employed individual: the one needs to refill the budget by means of tax charges and the other tries to minimize these charges. There is no legal way to decrease the amount of taxes artificially. If one decides to cheat the local tax office, a bunch of problems (primarily, financial ones) will appear at once. Notwithstanding, there is the way to optimize taxation load with the professional help of a qualified independent expert. Or imagine that the company staff made an error in the accounting estimate, and the owner will have to pay a heavy fine. This is another case when requesting a financial auditor’s services is the best solution.
The Portrait of a True Audit Professional
Let’s begin with the fact that every specialist acts in accordance with Generally Accepted Auditing Standards (GAAS). This is an independent expert that has no right to be wrong, so there is hardly a thing that could be left out of account. To do what auditors do, this person should possess such qualities as:
- Analytical thinking;
- Exact memory;
- The ability to concentrate;
- Enough diligence to work with numbers and documents;
- Commitment to principle;
An audit expert should have a degree in economics and know all the accounting standards to be able to check all the matters thoroughly and see the difference between errors and fraud actions.
The Core Of Work: What Does An Audit Accountant Do?
Financial audit procedure includes the following actions:
- Getting information about your company, its functions, and goals;
- Financial reports and transactions review;
- Analysis of inner documentation and balances;
- If needed, providing advice and assistance concerning the financial matters and ways to boost the efficiency of your company.
One should understand the main thing – that an independent auditor does is not what the staff accountant does. While accountant prepares financial statements, maintain documents and controls cash transactions, the requirement to an independent specialist is to check the result,e.g., pretty much checks the very staff accountant work. Consequently, a financial audit is a must for any business.
The Procedure of an Audit
In order for you to understand what auditors do to help every business owner avoid financial problems, please familiarize with two simple steps:
Step 1. You request high-quality audit services.
Step 2. Audit work takes place: if the accountant made an error, the auditor identifies the irregularities, and you save both money and reputation.
Sounds so simple, though, in fact, the matter is extremely significant for you as for an entrepreneur! The key point is to find a high-level expert who would do all the work thoroughly and correctly.
First, the client should prepare the financial report in accordance with all legal and financial standards. When the report is ready, it should be approved by the directors of your company. Then the auditor examines it, previously being aware of your company activity. Apart from it, public accountant takes into consideration the issues that could affect its activity for the time of reporting period. The final stage is the audit report where shareholders and company members can see the auditor's opinion. Such report displays whether everything is ok with the company financial matters and whether any fraud or errors were discovered
What Is Beyond the Competence of Certified Accountant
So, when you know what auditors do, let’s just mention what they can’t and won’t do for your company.
1. Make predictions;
It means that this person can’t tell for sure whether everything will be alright in your company even if the audit work was successful. You can get valuable advice from the independent auditor but not the prediction.
2. Do anything anytime;
Independent auditor is the person who controls your company from time to time, i.e., on demand. This specialist can’t and won’t check every detail and every matter. In case you want the audit work to take place in your company on a regular basis, you may hire the internal audit manager.
Who Is The Internal Auditing Manager?
Internal auditors are professionals whom businessmen can hire to work for their company and to control its activity from within in order to avoid any problems in their business. What do internal auditors do? Among their job responsibilities are:
- Internal control of financial matters;
- Accounting statements analysis;
- Assistance to help managers find out and estimate risks, create the strategy to decrease such risks in future and boost the efficiency of company systems and processes;
- Guaranteeing the truthfulness of all statements;
- Compliance with laws.
It should be mentioned that internal audit experts work not only with finances and accounting statements. They also have a skill of checking and consulting on non-financial issues. This point includes the compliance with any laws applicable to this or that business.
All in all, if you care about the financial well-being of your company and want to keep its reputation unchallenged, you obligatory need to keep all the entries and financial statements in order. What an auditor does is a significant part of your business control. This person is authorized to make the decision whether the company statements correspond financial reporting framework or not. From this perspective one key point becomes obvious – every entrepreneur needs an audit manager both to make sure everything is alright with the financial matters and to assure any third party of company reliability and trustworthiness.
As you have already found out what an auditor does, you may avoid problems and financial losses as well as maintain your company’s good reputation. Even if you are sure of your accounting specialist's scrupulous honesty, requesting audit services wouldn’t go amiss because caution is a parent of safety and (in your case) of financial well-being and goodwill as well.
Here are some videos that explain this role in business: