What does a Financial Auditor do?
In the field of finance, accuracy, reliability and time management is given so much importance. That’s why those people who work in this field are required to be responsible, accurate and attentive to the smallest detail. This is the same when it goes to being a financial auditor.
What is a Financial Auditor?
A financial auditor is responsible for inspecting accounting data, financial records and operational aspects of the organization to determine whether its financial statements follow the GAAP, or known as generally accepted accounting principles. They also analyze risk management processes to provide objective opinions on whether the systems are effective and adequate. In addition, they also investigate and prevent all kinds of frauds and other anomalies in the organization.
Types of Financial Auditors
There are two types of financial auditors, the external auditor, and the internal auditor
This type of auditors provides auditing services to businesses or organizations on a short-term or contractual period. Their common function is to provide an objective, public opinion concerning the organization’s financial statements and whether they correctly represent the financial position of the whole organization. They are typically employed by public accounting firms.
This type of auditors are directly employed by the organizations and are tasked to do auditing in corporations, non-profit organizations, and government agencies. They also work independently within the organization to provide financial and operational audits on their everyday operations. Internal auditors generally report to the audit committee to discuss operational problems or other financial discrepancies like fraud, and who is involved in it.
Role of an Internal Auditor
The role of an internal auditor is to review risk management, perform some controls and governance of an organization. Some other roles of an internal auditor are to:
1- Review an organization’s business process
2- Evaluation of risk management process
3- Make recommendations on how to improve internal controls and governance processes
4- Protect against fraud and theft of the organization’s assets
5- Ensure that the organization is following all the laws and statutes
Education required to become a Financial Auditor
For those who want to be an external auditor, one must have a bachelor’s degree or a master’s degree in accounting and holds a Certified Public Accountant or CPA license. For internal auditors, however, they are not required to have a license, so having a bachelor’s degree in finance and other business courses are acceptable. A candidate for an internal auditor must also have a 1-2 year experience and adequate skills in financial auditing.
How to get a CPA Certification and Licensing?
The eligibility requirements for the CPA position are different for every place or state- but most candidates are usually required to complete academic programs in accounting and show one fifty semester hours of qualifying coursework in accounting, business, and general education. Most candidates take at least some graduate courses to meet the coursework standard. After completing all the educational requirements, the candidate must pass the Uniform CPA examination to complete the certification.
Most financial auditors working in public accounting firms must also obtain a state CPA certification, in addition to their educational certification. The requirements may vary, but the common requirement is a CPA designation and two years of work experience in a public accounting firm.
The career path for the financial auditor
After obtaining a qualifying degree and a professional certification, a financial auditor can begin working in a junior position in the field. Most financial auditors transfer into these positions after working in another business field, such as accounting, finance or computer information systems. Both external and internal financial auditors can move to senior positions once they have already an adequate year of experience and good performance.