An auditor is a professional that is responsible for examining the financial statements and internal controls of an organization. These professionals follow standards set by different professional bodies to help them in the performance of their work. Auditors can be internal or external to a business. While there is a difference between internal and external auditors, they both need to maintain certain standards expected of them.
There are a few qualities that make auditors good. These standards are as below.
Auditors need to be competent in the tasks they perform. Competence means having the required knowledge and experience that is necessary to perform a task. Auditors need to have relevant knowledge regarding aspects of the auditing process such as financial reporting standards or taxation laws. However, knowledge alone does not suffice. Auditors must also have relevant experience in the field of audit and the industry of the client business, to properly apply the knowledge in practice.
One of the other key skills that auditors must possess to be successful is communication. During their job, auditors need to communicate with different parties. For example, auditors need to communicate with the management of the client business to obtain information or evidence that is relevant to the audit engagement. Furthermore, auditors also need to communicate internally, for example, with managers and partners. If an auditor does not have communication skills, they cannot obtain information from the client or communicate it reliably to others.
Different accounting and auditing bodies have recently highlighted the importance of professional scepticism for auditors. Due to the nature of audits, auditors need to obtain evidence from various sources. Sometimes, these sources may not provide the auditor with objective data. Therefore, the concept of professional scepticism suggests that auditors should always have a questioning mind and be alert to any conditions that may indicate possible misstatements due to various reasons.
The ultimate responsibility of an auditor is to provide the client business with an opinion based on their findings during the audit engagement. Therefore, auditors should ensure that they do not allow bias, conflict of interest and undue influence of others to override their judgements. Therefore, auditors need to remain objective. The importance of objectivity is so significant that it is a part of the IFAC Code of Ethics for auditors. If auditors are not objective in their judgements, the reliability of their opinion becomes questionable.
Apart from being objectivity, auditors also need to have integrity. Like objectivity, integrity is also a part of the IFAC Code of Ethics for auditors. While objectivity and integrity may sound similar, they are not. Integrity relates to being straightforward and honest in all relationships, whether business or personal. For example, if an auditor changes their opinion on a report, in exchange for some form of compensation from the client’s management, then their integrity is disputed.
Almost all assignments that auditors will take will have deadlines. Auditors must ensure that they obtain sufficient and appropriate audit evidence to form an opinion in the given timeframe. Therefore, auditors need to have effective time management skills. This will include planning, keeping to the proposed schedules, attending meetings on time and completing review work within a set time.
Auditors need to make decisions regarding different aspects of an audit assignment. The decisions may come before the commencement of the audit engagement, for example, in the planning phase, or they may come after the commencement of fieldwork, for instance, during review or forming opinion phase. Sometimes these decisions may not be straightforward to make. Furthermore, clients may lose trust in their auditors if the auditors lack decision-making skills. Therefore, auditors must have good decision-making skills and apply those skills during different stages in the audit.
It is also important for auditors to demonstrate leadership skills. While some may believe that leadership is something natural, on the contrary, it is a teachable characteristic. Auditors need to demonstrate leadership at different levels. For example, audit supervisors need to assess the work of audit associate and guide them regarding different aspects of the audit. Similarly, audit partners need to demonstrate leadership skills for audits and the audit firm as a whole and set the tone for audits. Through effective leadership, auditors can find solutions to complex problems and get those solutions implemented.
Auditors are professionals responsible for providing an opinion regarding the financial statements and internal controls of a business. For auditors to be successful, they need to have certain qualities or characteristics. These qualities include having competence, communication skills and employing professional scepticism. Furthermore, auditors need to maintain their objectivity and integrity during the audit. Lastly, they need to demonstrate time management, decision-making and leadership skills.