What Is an Auditor and What Do They Do? 

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Auditors are one of the bigger bosses in the accounting and finance world. An auditor’s role consists of reviewing and verifying the accuracy of the client’s financial statements. They also ensure that their clients are complying with the tax laws. Auditors also protect businesses from fraud and any financial errors. Auditors work in a variety of different capacities in a range of industries from sole traders to limited companies.  

The main job role of an auditor is to confidently make decisions. They need to determine if the submitted financial statements follow the GAAP which stands for Generally Accepted Accounting Principles.  

There are different types of auditors, from those who work in-house for the business and those who work for a separate firm. Once the auditor is hired, they will then create an audit and the final result of the report will be either qualified or unqualified. This is to ensure that legal compliances are followed.  

Auditors assess all financial operations, they are aware that organisations are running efficiently, and they also ensure that the cash flow is verified and accounted for from beginning to end.  

They must make sure that all records of finance are following the GAAP and auditors do this by inspecting all financial records, data, and other operational factors within the business. They take in-depth notes and record each step of the process to present back to the business which is called an audit trail. 

Once this process has been completed, the auditor will then move on to creating a detailed report to present back to the company management. These reports will include a financial inspection of the company, the audit trail, and other proof of compliance and verification that finances are being done legally and correctly. Private reports can also be created to the business’ management team and the authorised team if necessary. 

There are a variety of several types of auditors. Listed below are four of the main types of auditors: 

Internal auditors 

Internal auditors are hired in-house/within businesses to deliver financial information, operations, and financial analysis. They will also solve any issues or concerns within the financial sector of the business before disciplinary action occurs. 

External auditors 

Unlike internal auditors, external auditors work independently with the government, and they create reports which are based on a company’s financial records in order to determine their accuracy. 

Payroll auditors 

Up next are payroll auditors. Payroll auditors are a type of auditor that focuses on salaries. They see how employees are paid; they pay band rates for the business’ staff, but this depends on whether they have more of a senior role within the company. 

Forensic auditors 

The last type of auditor we have to share with you today is forensic auditors. We have written a previous blog about all things forensic auditors and what they do. To summarise, a forensic auditor uses their industry knowledge and skills to create an audit report for law enforcement agencies in order to scout out and catch illegal activity like fraud or theft. Forensic auditors are often called into cases and trials as witnesses of financial activity. 

For more information about our accounting services in Manchester, visit our website. 

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