Auditing is a part of business finance to check ledgers and financial statements of an organization. This is one of the career options available in the field of accounting to play an important role in business.
What is Auditing?
Auditing is a systematic process of objectively obtaining and evaluating the accounts or financial records of any organization. It involves the review, analysis and evaluation of processes, products, services, systems, organizations and employees. One who do auditing is called as an auditor. He / she is a trained person who is involved in checking the records.
Auditing is an essential part in all sectors includes government, government undertaking, departments, all big and small business, non-government organizations, public utilities, products, services, employees and performance, etc.
According to general guidelines on Internal Auditing issued by ICAI (Institute of Chartered Accountants of India) :
“Auditing is a systematic and independent examination of data, statements, records, operations and performance (financial or otherwise) of an enterprise for a stated purpose. In any auditing situation, the auditor perceives and recognizes the propositions before him for examination, collects evidence, evaluates the same and on this basis, formulates his judgement which is communicated through his audit report”.
Roles and Responsibilities of an Auditor
Work role of an auditor includes various checking and verification of financial records, systems, processes, policies, products, services, decisions and their implications to the organization, performance etc. Even though it is mainly focus on financial data and information, this may also include non-financial documents and information.
An auditor determines the efficiency, adequacy and effectiveness of an organization.
Major types of auditing conducted by auditors include financial audit (includes auditing of financial records and related matters), operational audit (includes operational procedures and related matters), management audit (related to management decision making), and compliance audit (related to determination of whether an organization is following established procedure or rules).
Educational Qualification Required
Basic requirement to become an auditor is bachelor’s degree in accounting (B Com.). A master’s degree in accounting (M. Com) or MBA in Finance are also considered as good qualifications to become an auditor. Specialized courses are also available for auditing. Computer knowledge and knowledge in accounting software are always an added advantage.
Advanced courses like ICAI or ICWA or CA are considered as good option to become higher positions in the field of auditing.
Skills and Knowledge Required
An auditor must have good knowledge in accounting as well as laws and rules related to accounting in the land. A good knowledge in the process and procedures of the company will also benefit. Accountants should have good mathematical skills, analyzing skills, interpretation skills, communication skills, presentation skills, team work skills, etc. They must be of persons with high integrity, honesty, trustworthy, accuracy, reliable, etc.
How to become an Auditor?
To become an auditor one has to opt for commerce in 10+2 or equivalent as their stream of study. After that they can opt for a bachelor’s degree in commerce (B Com) and obtain a post graduate degree in commerce (M Com). Obtaining computer literacy and certification courses in accounting software and courses related to auditing increases the chances to get an auditing job.
Some other advanced courses one can obtain are Chartered Accountancy (CA), MBA in Finance, ICAI (Institute of Cost Accountants of India) formerly known as ICWAI (Institute of Cost and Works Accountants of India), Forensic Accounting.
Different Courses in Auditing
Different courses that are helpful to become an auditor are as follows:
B Com. (Bachelor of Commerce)
M. Com. (Master of Commerce)
MBA (Master of Business Administration) in Finance
CA (Chartered Accountancy)
ICAI (Institute of Cost Accountants of India)
Where do I get the Job?
As the number of business concerns increases day by day, the scope of auditing as a career has increasing. Auditing jobs are available in all sectors, all industries, government, non-government organizations, etc.
A CA (Chartered Accountant) has a great opportunity in this field as it is mandatory for companies to audit their financial documents every year annually. Thus gives enormous opportunities and scope in the field of auditing as a career. Every big organizations have internal auditors as well as external auditors, so the opportunities are very high.