Thursday, March 14, 2013

What Is Actually The Role Of An External Auditor

By Hansen Thompson


Many people are actually under the impression that auditing and bookkeeping is one in the same thing, and that an auditor's job is consequently the same as that of an bookkeeper. In truth however, the two carry out a very different role. Simply put, an accountant keeps track of a company' fiscal transactions, while an auditor's work is to assess such records.

Generally speaking, you find two types of auditor. You get internal auditors and you find external auditors. The two serve pretty much the same purpose, but needless to say there is one difference. An internal auditor is normally hired by the business they are auditing, whereas an external auditor is not. Rather, they are employed by a separate firm.

The leading task of an internal auditor is usually to provide management with transparent and valid date regarding things like economic risk assessments. At the same time, they also happen to be responsible for ensuring a business is operating within the law so far as corporate tax is concerned. Furthermore, they are likewise expected to keep track of the company' books for signs of fraud.

External auditors accomplish very much the same type of role as internal auditors, so why don't all organizations just use their own auditors? Usually, external auditors are used by listed companies. This gives financial partners peace of mind in knowing that the auditors will deliver or show a honest and clear-cut audit because they are a completely independent entity, and therefore, they have nothing at all to gain or lose.

For obvious reasons, an organization that requires the services of an external auditor would have to locate and work with a local audit firm. To put it another way, if an organization is based in Singapore for example, they may need to use an audit firm in Singapore. Interestingly enough, in terms of getting a professional audit firm Singapore is actually a CEO's dream come true. There are numerous such firms, and not only are their auditors a lot more than qualified, but their prices are also amongst the best in the world.




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