External Auditor Role And Duties

ACCOUNTING, ACTIVELYSHARE.COM — External auditors have different roles and duties from other auditors. The external auditor is the person in charge of examining the financial statements and ensuring that they are correct and appropriate from the financial performance of the previous period. As well as, ensuring the current financial condition.

In addition, an external auditor is also tasked with evaluating the performance of the company that is his client, he is also asked to provide an opinion at the final session of the report.

Before knowing more about the role and duties of external auditors. It is important for you to know the meaning and types of auditors in general. In addition to knowing more clearly, you will also find it easier to understand the role and duties of external auditors than other auditors. Come on, see the article below!

What Is Auditor Definition?

Actually, who is the actor responsible for checking the overall data on a company’s income, savings and investment? Yes, the answer is an auditor.

An auditor is authorized to review and verify the accuracy of financial records and ensure that a company has carried out financial reporting in accordance with the mandate of the Taxation Act.

Understanding Auditor

Auditors play a role in protecting businesses from various forms of fraud and point out differences in accounting methods. In addition, an auditor can also provide consultation on financial audit tricks.

At the final stage of the audit procedure or examination of financial records, the auditor has the duty to write a report as a determinant of the level of accuracy and clarity that is taken into account by the company.

For example, when the company has completed all the accounting steps contained in the opening, and all the data in the records are in accordance with the company’s business strategy, the auditor will provide a final report that there are no errors in it.

Auditors also play a role in helping companies find ways to improve operational efficiency, such as reducing costs that are less essential. In general, auditors work in various capacities in different industries.

For example, in a public company, an auditor has the main task of determining whether the financial statements have quoted accounting principles applied by banks or not.

In order for these requirements to be met, auditors must carefully examine accounting data, all financial records to aspects of business operations. Then, detailed records are made at each step of the process, called an audit trail.

After everything is finished, the results of the auditors’ research will be presented in a report that is displayed in the financial statement statement. Other forms of reporting, such as a separate personal report, may also be provided to company management and regulatory authorities.

Types of Auditors

In general, auditors are divided into four types, namely external auditors, internal auditors, government auditors and forensic auditors. Actually what is the difference between the four?

Well, here we provide a full review of the types of auditors:

1. Internal Auditor

This profession is needed by the company to provide internal, independent and objective evaluations on all business activities. The duties of an internal auditor can be carried out by referring to the company’s financial processes and operational costs, including its governance.

An internal auditor will produce a report on the results of their examination, including providing tips on how to operate the business better.

2. External Auditor

External auditors are needed by the company for certain responsibilities. In contrast to internal auditors, external auditors can be an independent accounting or auditing agency that works for a company to conduct financial audits.

External Auditor

The task of the external auditor is to provide an objective opinion regarding the financial statements of a company and determine that the financial statements are free of any traces of criminal activity.

As the primary duty of external auditors, they are also required to review the accuracy of a financial report. So, do not be surprised if the external auditor will also observe the income and savings of certain staff. Usually, the external auditor will independently conduct an examination of the company’s financial statements.

3. Government Auditor

As the name implies, government auditors are in charge of maintaining and examining the financial records of government companies and private businesses. Government auditors will evaluate activities and determine whether the company complies with tax laws or not.

A government auditor must be able to ensure that the income received and spent by the company is in accordance with applicable laws and regulations. Here, auditors will also detect intrigues related to embezzlement of money, fraudulent schemes to analyze agency accounting controls.

4. Forensic Auditor

This type of auditor focuses more on examining an institution or company that is suspected by the authorities. Forensic auditors work under the auspices of auditing agencies or the police to lead investigations into criminal activities such as money laundering, fraud and corruption.

Forensic Auditor

Unlike the others, this auditor has been trained to be able to identify things that are considered suspicious in an operational activity.

The Role of External Auditor

The role of external auditors can generally be divided into two. Including the following:

  • An external auditor has a role that is quite vital for the common interest in the effectiveness of the company.
  • Share knowledge related to business, industry and risks that can be faced by the company.

External Auditor Duties

In addition to having a fairly vital role, the duties of an external auditor are also quite diverse, including the following:

  • The task of the external auditor is to provide an opinion on the report that has been successfully completed.
  • Assigned to conduct periodic or annual reviews.
  • Provide an assessment of whether it is in accordance with the applicable principles or not
  • Responsible professionally to the company in conducting audits.

Requirements to Become an External Auditor

An auditor’s career can indeed be said to be promising, if you are interested and have a dream of becoming an external auditor, know the requirements that you must fulfill:

  • Educational background in accounting
  • Have good technical expertise as an external auditor
  • Have an independent character in every collaboration carried out with clients
  • Able to utilize the expertise possessed professionally carefully as an external auditor

External Auditor Function

External Auditor FunctionAn external auditor has accountability to shareholders and is obliged to the company to carry out audit work in a professional manner. Here are some functions of an external auditor that you need to know:

  • Conduct an objective evaluation of the company’s internal control ratios and framework
  • Carry out systematic analysis and related controls
  • Reviewing the existence of asset values
  • As a source of information related to major fraud and irregularities

That is the role and task of the external auditor. Now you know how important their role is to the company.


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