INTRODUCTION

An audit is a systematic and independent examination of books, accounts,

statutory records, documents and vouchers of an organization to ascertain

how far the financial statements as well as non-financial disclosures present a

true and fair view of the concern. It also attempts to ensure that the books of

accounts are properly maintained by the concern as required by law. Auditing

has become such a ubiquitous phenomenon in the corporate and the public

sector that academics started identifying an "Audit Society". The auditor

perceives and recognises the propositions before them for examination,

obtains evidence, evaluates the same and formulates an opinion on the basis

of his judgement which is communicated through their audit report.

Any subject matter may be audited. Audits provide third party assurance to

various stakeholders that the subject matter is free from material

misstatement. The term is most frequently applied to audits of the financial

information relating to a legal person. Other areas which are commonly

audited include: secretarial & compliance audit, internal controls, quality

management, project management, water management, and energy

conservation.
As a result of an audit, stakeholders may effectively evaluate and improve the

effectiveness of risk management, control, and the governance process over

the subject matter.

The word audit is derived from a Latin word "audire" which means "to hear".

During the medieval times when manual book-keeping was prevalent,

auditors in Britain used to hear the accounts read out for them and checked

that the organisation's personnel were not negligent or fraudulent.

JOB DESCRIPTION

Auditors are specialists who review the accounts of companies and

organisations to ensure the validity and legality of their financial records.

They can also act in an advisory role to recommend possible risk aversion

measures and cost savings that could be made.

Auditors work in the accounting departments of a huge range of firms and

with independent chartered and certified firms, examining the money going

in and out of organisations and making sure it is recorded and processed

correctly.

Key activities include:

collating, checking and analysing spreadsheet data

 examining company accounts and financial control systems

gauging levels of financial risk within organisations

checking that financial reports and records are accurate and reliable

ensuring that assets are safeguarded

identifying if and where processes are not working as they should and

advising on changes to be made

preparing reports, commentaries and financial statements

liaising with managerial staff and presenting findings and

recommendations

ensuring procedures, policies, legislation and regulations are correctly

followed and complied with

undertaking reviews of wages.

Auditors work typical office hours from 9.00 am to 5.00 pm, Monday to

Friday. They may need to work extra hours or during the weekend to meet

deadlines, particularly during tax audits.

ENTRY QUALIFICATION

Auditing is a complex and fast evolving field and it is growing quickly as a

global profession. Holding an IIA qualification will give you the knowledge
and confidence you need to succeed, as well as the recognition and status

internal auditors deserve.

IIA qualifications are recognised internationally. And, our unique ability to

award Chartered Internal Auditor status means you can achieve the same high

levels of prestige and credibility enjoyed by members of other leading

professions.

In 2015 we adopted the Certified Internal Auditor (CIA) and the new

Qualification in Internal Audit Leadership (QIAL), which leads to Chartered

Internal Auditor status.

Qualifications

Internal audit is a varied role and individuals come from a range of

backgrounds and levels of education. The career is open to all graduates but a

degree, HND or foundation degree in one of the following subjects may be

considered beneficial and could increase your chances of future promotion:

accountancy;

economics;

finance;
 IT.

If you do not have a degree, HND or foundation degree it is still possible to

enter the profession, particularly if you have some related pre-entry work

experience. You will then gain recognition and will be able to progress as you

develop on-the-job knowledge and responsibilities.

It is not necessary to have a postgraduate qualification but it can be useful.

Relevant subjects include an MBA or other Masters-level qualification in

related subjects such as economics or business studies.

Skills

You need to demonstrate the following characteristics and skills:

the ability to use your own initiative;

analytical thinking and attention to detail;

the ability to work effectively on your own and as part of a team;

strong ethical standards and high levels of integrity;

the ability to think objectively and demonstrate sound judgement;

strong communication skills, both written and verbal;

organisation and facilitation skills;

resilience under pressure;

 flexible thinking and ability to adapt to change.

Work experience

In order to increase your chances of getting a job in internal audit, it is

advisable to get work experience. Summer internships and work placements

are available with accountancy and consultancy firms. Student membership

with the Chartered Institute of Internal Auditors (IIA) is also helpful as it

provides access to trade press, updates in the sector and networking

opportunities.

Certified Internal Auditor

If youre serious about a career in internal audit, becoming a Certified

Internal Auditor (CIA) will give you the skills, knowledge and career

prospects you need to achieve your goals. This stimulating postgraduate

programme leads to the globally-recognised CIA designation.

Chartered Internal Auditor

If youre already qualified in internal audit, why not maximise your potential

and raise your profile by becoming a Chartered Internal Auditor? The new

Qualification in Internal Audit Leadership leads to chartered status and the

CMIIA designation.
WORK DETAILS

attending meetings with auditees to develop an understanding of

business processes;

travelling to different sites to meet relevant staff and obtain documents

and information;

researching and assessing how well risk management processes are

working and recording the results using software such as Microsoft

Word and Excel;

providing ad hoc advice and guidance to managers and staff at all

levels, sometimes by delivering courses and training sessions;

performing risk assessments on key business activities and using this

information to guide what to cover in audits;

anticipating emerging issues through research and interviews and

deciding how best to deal with them;

providing support and guidance to management on how to handle new

opportunities;
 agreeing recommendations with relevant staff members to make

improvements to operations and helping to secure backing for them in

meetings;

preparing reports to highlight issues and problems and distributing the

reports to the relevant people;

assessing how well the business is complying to rules and regulations

and informing management whether any issues need addressing;

managing a variety of stakeholders and their expectations through

regular communications.

BENEFITS OF AUDITING

Auditing has become a compulsory task in the business organization. All the

organizations like business, social, industries and trading organizations make

audit of books of accounts. Now-a-days, owner of business and its

management are separate. So, to detect and prevent frauds, auditing has

become essential. Its advantages are as follows:

1. Audit Helps To Detect And Prevent Errors And Frauds

An auditor's main duty is to detect errors and frauds, preventing such errors

and frauds and taking care to avoid such frauds. Thus, even though all
organizations do not have compulsion to audit, they make audit of all the

books of accounts.

2. Audit Helps To Maintain Account Regularly

An auditor raises questions if accounts are not maintained properly. So, audit

gives moral pressure on maintaining accounts regularly.

3. Audit Helps To Get Compensation

If there is any loss in the property of business, insurance company provides

compensation on the basis of audited statement of valuation made my the

auditor. So, it helps to get compensation.

4. Audit Helps To Obtain Loan

Specially financial institutions provide loan on the basis of audited

statements. A business organization may obtain loan considering the audited

statement of last five years. So, an organization should make audit

compulsory to obtain loan.

5. Audit Facilitates The Sale Of Business

Valuation of assets is made by the auditor. On the basis of valuation of assets

and liabilities, businessman can sell his business. It helps to determine the

price of business.

6. Audit Helps To Assess Tax

Tax authorities assess taxes on the basis of profit calculated by the auditor. In

the same way sales tax authority calculates sales tax on the basis of sales

shown in the audited statement.

7. Audit Facilitates To Compare

An auditor instructs an accountant in the same way which helps to compare

books of accounts of current year with the accounting of the previous year.

So, comparing the accounts of current with previous years helps to detect

errors and frauds.

8. Audit Helps To Adjust Account Of Deceased Partner

Valuation of all the assets and liabilities of the business is made by the

auditor while auditing books of account. Such valuation helps to clear the

amount of deceased partner.

9. Audit Helps To Present A Proof

If any case is filed against the auditor regarding negligence, auditor can

present audited report as a proof to settle such case. So, it helps to present

proof to settle such cases.

10. Audit Provides Information About Profit Or Loss

A businessman wants to know profit or loss of his business after a certain

period of time. So, the owner of the business can get information about profit

or loss after auditing the books of accounts.

11. Audit Helps To Prepare Future Plan

All the audited statements remain true and correct. Such true and correct

account helps to prepare for the future plans.

12. Audit Helps To Increase Goodwill

Auditing shows the profitability and financial position of an organization

which creates faith of public over the business. Thus, auditing helps to

increase goodwill of an organization.

13. Audit Helps To Amalgamate The Company

Sometimes, same nature of organization may be amalgamated. Auditing

makes valuation of assets and liabilities which helps to amalgamate the

company. Purchaser of the company can accept such business organization on

the basis of valuation made by the auditor.

REGULATORY BODIES

Public Company Accounting Oversight Board (PCAOB)

A nonprofit corporation established by Congress to oversee the audits of

public companies in order to protect the interests of investors and further the

public interest in the preparation of informative, accurate and independent

audit reports.

Financial Industry Regulatory Authority (FINRA)

The largest independent regulator of securities firms doing business with the

public in the United States. The mission is to pursue investor protection and

market integrity, and carry it out by overseeing virtually every aspect of the

brokerage industry.

Municipal Securities Rulemaking Board (MSRB)

The MSRB is a self-regulatory organization created under the Securities Acts

Amendments of 1975 and a Virginia non-stock corporation. The mission is to

protect investors, municipal entities and the public interest by promoting a

fair and efficient municipal market, regulating firms that engage in municipal

securities and advisory activities, and promoting market transparency.

U.S. Commodity Futures Trading Commission (CFTC)

An independent agency with the mandate to regulate commodity futures and

option markets in the United States.

PROSPECTS OF A SUCCESSFUL CAREER

Auditing involves the review, analysis and evaluation of processes,

products, services, systems, organizations and employees.

Auditors assess the accuracy, validity, reliability, verifiability and

timeliness of organizational information, as well as the sources and

processes by which that information is produced. This is an important

role, because management and external parties thereby obtain an

accurate assessment of the organization under their stewardship.

Auditors also inspect an organization's internal controls and the extent

to which these controls manage an organization's risk exposures.

Internal controls help prevent the theft of a company's assets and, if

 properly designed and executed, prevent data manipulation by

employees.

Auditors ensure that checks are in place to help with the effectiveness

of financial and operational reporting. They also make sure that

controls are in place to protect an organization's assets.

Constraints in resources (hiring internal or external auditors can be

expensive) necessitate that an audit provide only reasonable assurance that

statements are free from significant errors. Due to the high cost of audits and

the fact that auditors cannot possibly verify every transaction that has taken

place, auditors use statistical sampling and make a determination (with

management) as to key focus areas. An audit is not a guarantee that financial

statements provide a perfect snapshot representation of the organization, only

a reasonable assurance that the statements are free of material misstatements.

(To learn what to look for when analyzing your own financial statements,

read Evaluating Your Personal Financial Statement.)

Useful Personality Characteristics

There are a few personal characteristics that are important for an auditor to

have:
 Auditors should posses a strong ethical framework and report on issues

(or anticipated issues) as they come across them. There is a temptation

to "let things go" as further investigation may require more work or

reveal embarrassing processes, performance and/or fraud.

Good communication skills allow auditors to have a rapport with a

variety of employees, managers, directors and external parties. As

auditors establish good rapport with a variety of individuals, however,

they should keep in mind the objectives of the audit (for instance, the

reliability, verifiability, accuracy and timeliness of information), as they

can often be tempted to not report on issues discovered.

Strong interpersonal skills are important, due to the variety of

informational requests - and often, resistance to those requests -

required from a variety of sources. Strong and/or ambitious types may

attempt to dissuade auditors from revealing embarrassing findings.

Auditors need to be team players. As the scope of the audit can be fairly

large, it is beneficial to help in other areas of an audit when resource

constraints warrant it.

 Finally, "professional skepticism" is an important trait to have,

especially when reviewing a company's internal controls.