The Importance of Auditors

Significance

The importance of the auditing profession lies in the duties the auditors perform and, consequently, by the types of auditors. They play an instrumental role in reining in the management of any company from window dressing its financial results. They help prevent fraud and thus protect banks and other lenders, general investors and even employees. If government auditors fail to perform, for example, your tax dollars will be used inefficiently and get wasted. Similarly, if tax auditors are absent, a large number of businesses will likely fail to correctly file their tax returns, costing hundreds of millions in inefficiency.

Duties

The duties auditors perform depend on their function and type. For example, government auditors examine the financial records of government agencies, and tax auditors examine a company's tax records. Auditors review financial statements for compliance with laws, regulations and the accepted accounting practices. They sniff out trails of fraud and misrepresentation. They also suggest ways to improve cost, revenue and the control structure of a company. An auditor's opinion must be her own, and when she renders that opinion, she can't allow the company or external parties to influence her judgment. All of this work requires close coordination and liaison with the company's employees.

Internal vs. External

The role of auditors can depend on where they reside. Those that set up temporary offices within a company are external auditors. When the audit exercise is over, they give their opinion, which may include suggestions for fixing problems, and then exit their temporary offices, leaving the company to make any necessary adjustments. Internal auditors perform the same functions as external auditors, except that they don't get to leave after the audit exercise. They monitor the effectiveness of internal controls and manage risks of fraud and misrepresentation in the financial records. They also must assist external auditors.

Insight and Outlook

In addition to a bachelor's degree in accounting, auditors must have relevant work experience. The nifty CPA designation indicates that they are certified in public accounting. Additional certification is ideal for those who specialize. For example, certification in financial management is a good option for those who want to pursue a career in risk management and investment. According to the information provided by the U.S. Bureau of Labor Statistics, audit and accounting professionals earn a mean income of $71,040 as of May 2012, and the income can go above $110,000 per year for highly qualified auditors. Tighter regulatory requirements, increased globalization and positive economic growth are likely to fuel a higher demand for this profession.