Types of Auditors
Auditors may specialize in various fields and may conduct many different types of audits. There are two major types of audits: external audits and internal audits. In an era when information technology is the keystone for virtually anything a business does, the need for information systems analysis is especially keen. Such auditors look at the entirety of a company’s technological infrastructure, assessing any type of risk and vulnerability in the process. The auditor provides a thorough report to management and makes recommendations for upgrading or replacing technology systems and risk minimization.
An internal auditor, who works for the firm, reviews a company’s entire operations and financial reporting system. Naturally, internal auditors conduct internal audits. A complete audit of this type includes examining all records, as well as policies, procedures and compliance. The auditor then recommends changes in current company practices, outlining what he or she sees as potential issues. Once an internal review is complete and necessary changes made, the company’s management should feel confident it will do well when an external audit is conducted.
External auditors thus conducts external audits that evaluate a company using Generally Accepted Accounting Principles, which sets forth auditing standards for the United States and elsewhere. They often work with internal auditors for process coordination and to evaluate internal controls. However, external auditors either work independently or for a public accounting firm. The external auditor specifically looks for any risk of fraud or other financial impropriety. Their results, along with recommendations, are presented to the company’s management or a third party, such as the IRS.
Audit managers conduct ongoing examination and evaluation of various business components, including accounting, internal controls, finance, information technology and general operations. This job is often called either assurance management or risk management. Along with constant evaluation for business compliance, audit managers usually train and supervise new accountants and auditors to perform financial audits. They may also oversee IT audits.