An external company auditor reviews a certain aspect of your business operations and then reports on it. For many organisations, the annual audit of the financial statements is required by law, but auditors are also called in by other businesses for their expertise.
One thing is certain: independence and impartiality are the supreme virtues of the auditor. He must not be involved in any way in the decision-making process of the organisation that he is reviewing. A number of rules of professional ethics in this area are set out in law, including independence.
A trusted figure for financial issues
Auditors are primarily associated with audit engagements. The best known of these is the mandatory audit of the financial and administrative organisation of larger companies and non-profit organisations: the so-called statutory audit.
But you can also call on the independent and impartial expertise of an auditor for financial issues such as business valuations, support with the preparation of a business plan or financial plan, takeover advice, financing questions, integration processes and so on. The auditor acts at such times as a trusted figure: he objectifies and substantiates the financial question, so that the business manager can make a proper decision in full knowledge of the facts.
The statutory audit: a step-by-step plan.
Each statutory audit follows a particular step-by-step plan:
- Risks: the auditor identifies the risks faced by your company. He also analyses and checks the internal control systems in order to limit or avoid these risks. This risk analysis forms the basis for the rest of the audit approach.
- True and fair view: the auditor checks the significant items in your financial statements and ascertains whether they give a true and fair view. If there are material errors, corrections are proposed. The auditor presents his findings during the closing meeting.
- Audit report: the findings on the financial statements are presented in an audit opinion, which follows international audit standards.
Auditors: a regulated profession
Finally: the auditor belongs to a regulated profession. The procedure for joining the profession is strict and includes a three-year traineeship. But the auditor must also receive continuing training afterwards, so that he is always up to date with the latest legal provisions.
Auditors work on the basis of international regulations. Only persons or entities (such as audit firms) affiliated with the Institute of Auditors (IBR/IRE) may carry out a statutory audit.
