What Does an Auditor Do?

Accountants have ample career paths from which to choose. They can enter private industry or public accounting, specialize in taxes or financial reporting, work for the government, or investigate financial crimes—to name a few. But if auditing has sparked your interest among all the options, learn more about what does an auditor do. Find out the importance of auditors, their role within a firm or organization, day-to-day responsibilities, skills, salary, and more to help you define your career goals. 

Summary 

Auditors safeguard organizational health and compliance by analyzing financial records against legal standards and best practices, a role that requires a blend of technical skills and professional certifications to navigate a career path characterized by high earning potential and steady growth. 

What Is an Auditor? 

Auditors work within their organization or firm to determine whether a company’s financial records and processes align with legal standards, best practices, and organizational goals. 

In essence, an auditor’s job is to gather as much information about what’s actually happening within a company and compare that data against what should be happening. Auditors can then pinpoint errors or even fraud, suggest ways to improve upon efficiency or accuracy, and guide organizations to stay compliant and reach their objectives. 

Types of Auditors 

• External Auditors 

The Securities and Exchange Commission (SEC) requires that all public companies be reviewed by an external auditor. This creates the demand for external auditors—normally working within a public accounting firm—who assess companies and provide objective, public reporting on their alignment with industry-wide standards like GAAP. 

External auditors must possess a Certified Public Accountant (CPA) license to sign off on their findings and send them to the SEC. 

• Internal Auditors 

Internal auditors work within an organization to assess its compliance and operations against its self-defined goals. As opposed to external auditors, internal auditors are not required to report their findings outside of the organization. Their work is primarily for internal management, as a key pillar in financial decision-making and problem-solving. 

While internal auditors are not legally required to gain licensure, their career prospects exponentially grow with specialized credentials like the Certified Internal Auditor (CIA) certification. 

• Government Auditors 

Government auditors are employed through the government and assess government agencies and any organization subject to government taxation and regulations. Their job includes tasks such as finding embezzlement and fraud, evaluating risks, and ensuring that spending aligns with the law. 

• Specialized Auditors 

Some auditors specialize in specific areas like IT or forensic auditing. For the latter, this means auditing criminal cases and supporting law enforcement when bringing charges and understanding evidence. IT auditors, on the other hand, are often hired by organizations who want specific evaluations of their IT processes, systems, and security. 

Why Are Auditors Important? 

The idea of an audit can be daunting to those being evaluated—someone will be scrutinizing your work, checking your accuracy, and suggesting ways to improve. However, auditors of all kinds are vital for every company’s health and growth. 

Whether through external auditors that keep a company legal and compliant, or through internal auditors who help preemptively optimize operations and business function, organizations rely on auditors to keep them compliant, ethical, safe, and continuously moving toward their financial goals. 

What Do Auditors Do? 

To gather, analyze, and report their data, auditors must wear many hats. So, if you’re interested in a career where no two days are exactly alike, auditing might be for you. 

Auditors work across teams and often with many clients (except for internal auditors, who work within a single company), so their day-to-day activities vary greatly. However, most auditors do the following tasks. 

Status Meetings 

Many auditors have weekly meetings—sometimes referred to as “stand-ups”—with their managers and coworkers. These meetings are a chance to update the team on the status of their client engagements and ensure all audit team members know what’s going on with the audit overall and what tasks they need to accomplish that week. 

Auditors also meet regularly with clients—either in person, over the phone, or via videoconference—to update management on the status of the audit and discuss any issues that arise. Depending on the client, these status meetings might happen daily or weekly. 

Audit Planning

Audit planning is a crucial part of the audit process. It involves developing a strategy and detailed approach to ensure that all areas of the client’s financials are covered and given appropriate attention. 

Planning an audit might include: 

• Reviewing last year’s audit workpapers
• Discussing new risks with management
• Using technology to assess risk and select audit procedures
• Briefing the audit team
• Creating an audit schedule
• Ensuring the client is on board with the timeline and knows what information they need to provide 
   

Performing Audit Procedures 

Auditors perform audit procedures to get all the information they need to assess their clients’ numbers and form an opinion on their financial statements. Audit procedures vary from audit to audit and client to client but generally include analytical reviews, inquiry, inspection, observation, and recalculation. 

Depending on the firm and the client, auditors might perform audit procedures at the client’s place of business, the firm offices, or a home office. Remote audits rely heavily on technology, including secure client portals, videoconferencing technology, and cloud-based accounting software to gather and store all data. 

What Skills Do Auditors Need? 

Today, technology automates many of the testing procedures auditors used to perform manually. But make no mistake: while technology undoubtedly makes an auditor’s job easier and more efficient, it doesn’t replace the unique skills that each auditor brings to the table. 

Auditors need to be highly proficient in technical concepts including: 

• Accounting
• Auditing process best practices
• Tax law
• Audit technology 

This technical knowledge must go beyond the basics, with a high command that allows auditors to interpret and analyze a company’s financial data and reporting, and then offer insights on improvements and decision-making. 

In addition to this expertise, auditors need the following auditor soft skills to enhance their workflow:  

• Communication. Auditors need to communicate effectively with their team to plan and perform audit procedures. They also need to interview and negotiate with their clients’ employees and board of directors. Being able to simplify complex topics—verbally and in writing—is crucial.
• Skepticism. Part of an auditor’s job is to prevent and detect intentional or unintentional errors in a company’s financial reporting. This means auditors can’t automatically accept information provided by a client at face value. They need to ask probing questions, critically assess audit evidence, and pay extra attention to red flags and inconsistencies to uncover risks and potential errors.
• Project management. Financial statement audits are essentially large projects made up of many smaller tasks with team members, assigned deadlines, and a final deliverable. To keep the engagement on track and profitable, auditors need to plan their work, stay focused, and overcome challenges to deliver their work on time.
• Initiative. Technology, accounting principles, and auditing standards are constantly evolving, and auditors must stay current on what’s happening in the profession. If you want to be successful, plan to pursue professional designations, certifications, and continuing professional education throughout your career. 
   

Auditor Qualifications and Certifications 

As previously mentioned, external auditors must obtain a CPA license to be qualified for SEC reporting. Without licensure, you cannot sign off on any SEC documents, meaning that you cannot work as a lead auditor in a public firm. 

But even for internal, government, and specialized auditors, career growth comes with earning credentials that certify expertise and experience. These are some of the most important audit certifications. 

CPA license 

• Essential for career growth as an auditor in public accounting, as previously noted. Being a CPA also certifies your expertise in tax and general accounting areas within a public firm. 
   

Certified Internal Auditor^® (CIA) certification 

• The most valuable credential for growing a career in internal auditing. It is managed and administered by The Institute of Internal Auditors^® (The IIA), the organization responsible for establishing the Global Internal Audit Standards^TM. 
   

Internal Audit Practitioner^TM (IAP)  

The stepping-stone to becoming a CIA, built for students and early professionals who want to prove aptitude in internal auditing, but may not yet meet the requirements to become a fully certified CIA. 

Certification in Risk Management Assurance^® (CRMA) 

• The CRMA certifies your ability to offer risk management assurance services to audit committees and organizational management. 
   

Certified Information Systems Auditor^® (CISA) 

• For IT auditors, the CISA certification demonstrates the ability to apply risk-based approach to audit engagements and expertise in the organizational impact of innovations like AI and blockchain. 
   

Certified Fraud Examiner (CFE) 

• Especially useful for auditors interested in forensic work and fraud investigation, advancing a career in the prevention, detection, and examination of financial fraud. 
   

Why Choose Auditing? (Or Why Not?) 

If you have an interest in auditing and accounting, an investigative and curious personality, and a keen eye for analysis, there are many benefits to choosing an auditing career. 

The career outlook for auditing professionals is set to grow 5% from 2024 – 2034, faster than the average 3% across industries.¹ Likewise, the earning potential for audit professionals is high—with even more opportunity as you earn credentials and experience. The average CIA salary, for example, is around $100,000 annually (about 35-50% more than non-certified internal auditors), and experienced CIA professionals can earn well over $200,000 per year. If salary and growth opportunity are important factors as you plan your career goals, becoming an auditor is a great decision. 

But it’s also important to understand the challenges you’ll face as an auditor. You must study and work hard to gain the expertise required to own audit procedures, and you should be willing to invest the time and dedication to ear credentials that allow for your career advancement. Auditors must also carefully plan their work/life balance, especially during busy season when many auditors work well over 40 hours per week. 

But despite these challenges, the career allows for flexibility as you gain experience and move into roles of higher responsibility. Many auditors go on to become partners in their firm or CFOs at private corporations, and others end up starting their own businesses—affording you the space to work in areas that truly interest and fulfill you. 

Go Further in Auditing 

No matter where you’re taking your auditing career, Becker meets you with the support to go even further. 

Our CPA Exam Review has been trusted by over 2 million professionals to help them achieve licensure and grow their public accounting careers. 

Becker also partners with The IIA to provide CIA Exam Review, IAP Exam Review, and CIA Challenge Exam Review (the accelerated path to becoming a CIA for CPAs and other certified professionals). 

Learn more about the right option for you in our FREE downloadable eBooks, the CPA Exam Guide and CIA Exam Guide.

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