Auditing is a vast subject, has a massive impact on our society and plays a pivotal role in regulating the economy. It is a broad field, and some people in the profession of accounting & finance spend their entire life performing audits — others who don’t still spend plenty of time for auditing or related items. Auditing is so popular that even non-finance people also come across this subject from time to time, during their work.
Mastering the art of auditing would require years of experience, deep learning passion, and spending numerous hours concentrating on the audits. You need to stay away of all distractions and always keep thinking about “what could go wrong” or “what is the audit risk” or “what is the control risk” related to this assignment. If you are choosing the auditing as a profession, you have to question every item and assess that item’s impact on financial statements.
An auditor would assess the impact of transactions on the underlying financial statements. He/she will do it by trying to link a transaction with the financial statements. For example, how sales impact financial statements? What will be the impact of renovation going on the office on the financial statements? What is the audit risk in the new car purchased by the CEO? What is the control risk in selecting a supplier for awarding construction of new office building? What is the inherent risk in the outsourcing of call center?
The mind of an active and ambitious auditor would always seek clarifications. He would question every transaction, every process, every deal, every event and every system, all with scepticism. He would link all these items with the financial statements of the organization and vice versa. Does he see the building of the audit client on the balance sheet of the company? Can he trace back the rental income in the profit and loss account? Can he link the increase in the staff with the increase in the payroll cost during the year?
Many people enjoy auditing as it would provide the opportunity to visit different companies. An audit manager would be handling around 30-40 clients in a year, depending upon the size of the firm and the economy in which he operates. Visiting different companies, meeting with a variety of people, reviewing multiple accounting systems and assessing business risks of different sectors is a fascinating, challenging and skillful job. Auditing will expose you to various industries like real estate, retail, FMCG, manufacturing, oil & gas etc. This variety is quite fantastic and exciting.
To commence the career as an auditor, you usually need to join as an audit trainee or audit associate in an audit firm. Mostly audit firm provides three years or five years of training programs. You can also continue your studies during this training period. The hierarchy in an audit firm would be something like audit associate, semi senior associate (or associate 2) and senior associate (or associate 3), audit supervisor, audit manager, senior manager, audit director and then audit partner.
Many external auditors prefer to stay in the audit firm for an extended period and seek to become audit partners in the audit firm. Usually, an audit partner is the highest rank in the field of external auditing. Some partners are further promoted later to the level of the senior partner or managing partner. Many people choose to move out of an audit firm during different stages of their audit career. The move is usually into some company. If a person moves from audit practice to join a company in their accounts/finance team, they call it a ‘career in the industry’.
Auditing as a career is quite promising; it provides a career ladder, a stable job and a continuous learning curve. General public considers auditors as people of high integrity and excellent ethical standards. A career as an external auditor would lead to respect in society and would strengthen your network.