Why Your Business May Need an Auditor

The word audit is a terrifying thing for the layman, as it’s often associated with the IRS and your taxes. But in the business world, an auditor can be an important financial tool for companies both large and small. An auditor is an individual employed by or working for a company that investigates and evaluates the business as a whole or a specific part of the business, such as financial records. In some cases an individual may be audited as well.



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An auditor may provide a wide variety of services, though the primary goals of an audit typically include determining the validity of certain information or practices, as well as to determine whether or not a company or an individual is working at an acceptable level of efficiency. In essence, an audit is simply nothing more than an evaluation. In the world of accounting, an auditor is typically used to help evaluate financial records, often once a year before financial records are released.

For most financial audits, an outside auditor, called an external or statutory auditor, is typically hired. An internal auditor is an auditor hired as an employee of the company, though they typically do not work in the financial realm. As a result, a company could have two auditors working at any given time. A financial auditor usually comes from a firm of accountants, and he or she will be specially trained in the field of financial auditing, as opposed to simple bookkeeping or tax preparation.

Auditing exists outside the realm of finances, as well. Non-profit organizations and government agencies typically require audits to ensure the company is running smoothly. These are called performance audits. A performance audit can be performed in a wide variety of areas, including security, information systems, safety, and environmental concerns.

Auditors work under an umbrella of objectivity, adhering to a special set of standard and guidelines set forth between the governing bodies. This is to ensure minimal bias, as well as the reporting of accurate information. If your business needs a financial auditor, you should contact local accounting firms and inquire about their services and areas of expertise. Not every accountant can be a financial auditor, so be sure you select one with the proper experience.

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Posted on June 5, 2012 at 9:00 AM