What is an auditor

An auditor plays a crucial role in the realm of corporate governance by performing accounting controls at companies subject to audit. Beyond the conventional auditing function, auditors also serve as advisors on laws and regulations, guiding companies in maintaining compliance and financial accuracy.

When a company is subject to audit, it necessitates the involvement of an external and independent auditor. The primary task of an auditor is to verify that the company has prepared its annual financial statements in accordance with applicable laws and regulations. This verification process involves a meticulous review of financial records to ensure accuracy and adherence to legal requirements.

Audit process

Auditors conduct thorough audits at companies subject to scrutiny, scrutinizing the annual financial statements to provide assurance regarding their accuracy and compliance. Additionally, auditors can serve as advisors, assisting companies in navigating the complex landscape of laws and regulations governing financial record-keeping.

Internal and external auditors

In Australia, the auditing landscape is characterized by two principal categories of auditors: internal auditors and external auditors.

1. Internal Auditors: Internal auditors play an ongoing role within an organization, conducting comprehensive analyses of various facets to assess the effectiveness of established systems. Their responsibilities extend to auditing and controlling services related to the company’s finances, business practices, and risks over an extended period.
2. External Auditors: External auditors, appointed for a specific duration, focus on performing audits of the company’s financial statements. Their engagement concludes once the audit is complete. The primary objective of external auditors is to ensure that the organization’s policies and procedures are implemented with financial compliance and accuracy.

These two types of auditors have distinct roles and responsibilities in evaluating and ensuring the effectiveness of an organization’s systems and financial practices. Internal auditors contribute to continuous improvement and risk management, while external auditors provide an independent perspective to validate the accuracy and compliance of financial statements within a specific timeframe.