What is the primary responsibility of an auditor?

Auditors review the accounts of companies and other organisations to ensure their financial records are correct and in line with the law. They could be inspecting the accounts of their own employer or those of another organisation, and they can also act in an advisory role to recommend risk aversion measures and cost savings.

Typical duties 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 protected
• 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 typically work standard office hours, plus some overtime or weekend working at busy times, particularly at the financial year end. When conducting audits for clients, they may be required to work from their client’s workplace.

Discover more about careers in auditing (and assurance work, of which auditing is a type, more broadly).

Auditors’ salaries vary according to location and the type of employer. The National Audit Office offers graduates on their accountancy scheme a starting salary of £31,187 in London and £25,196 in Newcastle, for example, while you can expect the likes of the Big 4 professional services firms (Deloitte, EY, KPMG and PwC) to pay higher rates.

According to a recent salary survey from the recruitment agency Hays UK, senior qualified auditors in the public practice of a private accountancy firm typically earn £33,000–£49,000 and directors £70,000–£110,000, depending on their location (with the lowest figures offered in Wales and Northern Ireland and the highest in London and the south east of England).

Read more about the salaries and benefits in accountancy .

Auditors can be either internal or external.

Internal auditors may work:

• for professional firms outsourced by client companies
• in-house as part of an organisation’s accounting team
• for large private companies, organisations and charities

External auditors may work:

• with private firms of accountants
• for the National Audit Office, where they carry out obligatory audits of the public sector and governmental bodies.

There are routes into a career in audit for both university graduates and school leavers, though routes differ depending on whether you are aiming for internal or external audit.

External auditors first need to qualify as chartered accountants with a professional accounting body. For more information about how to do this, see our accountant job description .

Alternatively, you can gain a qualification with the Chartered Institute of Public Finance and Accountancy (CIPFA) to work as an auditor in the public sector.

You can also study for a professional accounting qualification while working for the National Audit Office, which offers a three-year graduate scheme.

Achieving qualifications can take three to five years but you will work while studying. Employers often provide financial help with exams and allow time for study leave.

Internal auditors do not have to qualify as accountants. You can apply with a degree in any discipline but subjects such as accountancy, economics and IT are particularly beneficial. School leavers can enter the profession by starting as a trainee auditor or apprentice.

An auditor is an authorised personnel that reviews and verifies the accuracy of financial records and ensures that companies comply with tax norms. Their primary objective is to protect businesses from fraud, highlight any discrepancies in accounting methods, among other things.

The role of an auditor, in general, is no walk in the park. Having been regarded as a certified professional, the auditor has placed himself, responsibilities to various parties and the duties that go with it.

The auditor’s opinion basically makes or breaks the reliability of the financial statements and the information they provide. Audited financial statements have an extremely high degree of reliability and validity in comparison with unaudited statements.

Who is an Auditor

In simple terms, an auditor is an individual who is appointed to inspect the books of accounts of a company, the validity and accuracy of the transactions contained therein. He also forms an opinion on the overall view of the financial statements, whether the statements depict a true and fair view of the entity’s financial position.

Duties of the Auditor

The duties of an auditor have been laid down by the Companies Act, 2013, provided in Section 143. The Act explains the duties in a simplified manner, although the list given is not exhaustive.

Prepare an Audit Report

• An audit report, in simple terms, is an appraisal of a business’s financial position. The auditor is responsible for preparing an audit report based on the financial statements of the company. The books of accounts so examined by him should be maintained in accordance with the relevant laws. 
• He must ensure that the financial statements comply with the relevant provisions of the Companies Act 2013, relevant Accounting Standards etc. 
• In addition to this, it is imperative that he ensures that the entity’s financial statements depict a true and fair view of the company’s financial position.

Form a negative opinion, where necessary

The auditor’s report has a high degree of assurance and reliability because it contains the auditor’s opinion on the financial statements. Where the auditor feels that the statements do not depict a true and fair view of the financial position of the business, he is also entitled to form an adverse opinion on the same.

Additionally, where he finds that he is dissatisfied with the information provided and finds that he cannot express a proper opinion on the statements, he will issue a disclaimer of opinion. A disclaimer of opinion basically indicates that due to the lack of information available, the financial status of the entity cannot be determined. However, it is to be noted that the reasons for such negative opinion is also to be specified in the report.

Make inquiries

One of the auditor’s important duties is to make inquiries, as and when he finds it necessary. A few of the inquiries include:-

• Whether loans and advances made on the basis of security are properly secured and the terms relating to the same are fair
• Whether any personal expenses (expenses not associated with the business) are charged to the Revenue Account
• Where loans and advances are made, they are shown as deposits. d. Whether the financial statements comply with the relevant accounting standards

Lend assistance in case of a branch audit

Where the auditor is the branch auditor and not the auditor of the company, he will lend assistance in the completion of the branch audit. He shall prepare a report based on the accounts of the branch as examined by him and then send it across to the company auditor. The company auditor will then incorporate this report into the main audit report of the company. In addition to this, on request, if he wishes to, he may provide excerpts of his working papers to the company auditor to aid in the audit.

Comply with Auditing Standards

The Auditing Standards are issued by the Central Government in consultation with the National Financial Reporting Authority. These standards aid the auditor in performing his audit duties with relevant ease and accuracy. It is the duty of the auditor to comply with the standards while performing his duties as this increases his efficiency comparatively.

Reporting of fraud

Generally, in the course of performing his duties, the auditor may have certain suspicions with regard to fraud that’s taking place within the company, certain situations where the financial statements and the figures contained therein don’t quite add up. When he finds himself to be in such situations, he will have to report the matter to the Central Government immediately and in the manner prescribed by the Act.

Adhere to the Code of Ethics and Code of Professional Conduct

The auditor, being a professional, must adhere to the Code of Ethics and the Code of Professional Conduct. Part of this involves confidentiality and due care in the performance of his duties. Another important requisite is professional scepticism. In simple words, the auditor must have a questioning mind, must be alert to possible mishaps, errors and frauds in the financial statements.

Assistance in an investigation

In the case where the company is under the scope of an investigation, it is the duty of the auditor to provide assistance to the officers as required for the same. Hence, it can be seen that the duties of the auditor are pretty diverse, it has an all-round and far-reaching impact. The level of assurance provided by a set of audited financial statements is comparatively far higher as compared to regular unaudited financial statements.

What are the three key responsibilities of an auditor?

Who is a primary auditor?