To understand the meaning of the term ‘auditor’, it is important to understand the role it plays in business. An auditor is an independent, third-party professional who is hired to review the accuracy and completeness of financial statements, as well as other documents related to the accuracy of a company’s financial information. They are responsible for providing independent assurance that these documents comply with generally accepted accounting principles.
Qualifications of an Auditor
Auditors may have a variety of qualifications such as a Certified Public Accountant (CPA) or a Certified Management Accountant (CMA). Other qualifications include a Certified Internal Auditor, Certified Government Auditing Professional, and a Certified Fraud Examiner.
The Work of an Auditor
When auditors review financial statements, they are ensuring that the figures reported represent a “true and fair” view of the company’s financial position. Auditors must also investigate any irregularities or discrepancies in the data. The main goal of an auditor is to provide assurance of accuracy to stakeholders, creditors, and investors, whether it is for a company’s outside financial reporting or for internal control.
Benefits of an Auditor
The presence of an auditor can increase the confidence of investors, and especially potential investors. This is because it adds an extra layer of assurance that financial statements are accurate and that there is a reliable system of controls to prevent fraud. Furthermore, an auditor can help a company better understand the risks that it may be facing which can help them better plan for the future.
Conclusion
Overall, an auditor is an important part of any business as they offer an independent assessment of financial figures and help prevent fraud and mismanagement. A business relying on auditors to review its figures can understand its financial situation better while also boosting investor confidence. To summarise, the job of an auditor is to provide an impartial evaluation of the accuracy and fairness of a company’s financial performance.