What is an auditor and what do auditors do?

At a glance

• An auditor is a financial professional, similar to an accountant, who works within governing bodies, private companies, nonprofits and almost any other organization with financial resources. 
• Job duties of an auditor include gathering financial and tax information and preparing financial statements on a company’s financial health.
• According to the U.S. Bureau of Labor Statistics, a bachelor’s degree is typically required to become an auditor. 
• University of Phoenix offers a Bachelor of Science in Accounting degree which can help you learn foundational skills to pursue a career as an auditor. 

If you have a passion for finance and a strong attention to detail, you might enjoy a career as an auditor. Often, people associate audits with the Internal Revenue Service (IRS) trying to weed out fraud. However, auditors work for a variety of businesses to keep finances in order. These professionals work within governing bodies, private companies, nonprofits and almost any organization with financial resources. Read on to learn more about the daily life of an auditor and what it takes to become one.

What is an auditor?

An auditor is a financial professional who’s responsible for reviewing financial documents for accuracy, highlighting potential concerns among the records and recommending ways to set internal controls. They might assemble reports to provide high-level insights into the organization. When businesses and individuals submit their federal taxes to the IRS, auditors review the documents to make sure they are accurate and truthful. If something looks off, they might request a deeper dive into the finances of those parties. 

However, auditors aren’t limited to government work, according to the U.S. Bureau of Labor Statistics (BLS). Internal auditors review tax documents to make sure they’re accurate before the company submits them. They also review financial documents to ensure the company is basing its operational decisions on accurate numbers. 

Without auditors, companies wouldn’t have the ability to double-check their financial documents for accuracy. This could lead to poor management decisions, overlooked regulatory requirements, over- and underpaid taxes and possibly even fraud. 

What does an auditor do?

The auditor job description varies by organization; however, there are a few common tasks that most auditors complete throughout the year, according to the BLS. These responsibilities include: 

• Reviewing accounts for discrepancies
• Preparing financial statements for senior management to review
• Gathering financial information for tax filing 
• Reporting on the health of the company with respect to finances and regulatory compliance standards.  

Auditors follow the financial calendar, and the heft of their workload might depend on the time of the year. For example, they are typically busy during spring (tax season), the beginning of each quarter and around the end of a fiscal year. Keep in mind that not all companies end the fiscal year on Dec. 31. You might work for an organization that starts its fiscal year in July, which may affect your workload.

Types of audits

There are multiple types of reviews and checks that an auditor will complete in their role. A financial audit will focus on the inflow and outflow of cash to the company. An operational audit will review profit margins and expenses of the company's business model. There are also compliance audits that ensure organizations are following laws and developing fair business practices.

Auditors can work within companies or as third-party representatives. When professionals work for a company and review its financial reports, they are internal auditors. When they work for the IRS or a consulting group that is contracted to perform audits, they operate externally.  

How to become an auditor

It’s possible to develop a strong financial background that makes your resumé appealing to companies that need auditors. However, you must complete the following steps to become an auditor.  

Education

Formal education is encouraged for people who want to become auditors. According to BLS, a bachelor’s degree in accounting or a related field, like finance or business, is typically required. An accounting degree can help provide the necessary skills for this role, such as different bookkeeping principles and how to develop financial reports.

As you pursue your degree, you can also look into online courses on auditing to develop these skills in your spare time. Online courses are flexible options for people who work full time but are looking for a new career path. 

Skills needed to be an auditor

Auditors need a mixture of hard skills related to finances and soft skills. Some of the top hard skills for auditors are knowledge of auditing reports and the ability to complete financial statements. 

The most sought-after soft skills for auditors include attention to detail, clear communication, analytical abilities, and critical thinking to imagine efficient ways to implement internal controls. 

Accounting experience

Even with a bachelor’s degree, you might not be able to immediately launch your auditing career. Many auditors start as bookkeepers and accountants to grow their skills, business acumen and experience. 

Be sure to choose an educational program that offers accounting courses, even if you are seeking a finance or auditing-related degree. This can help you get noticed by entry-level accounting hiring teams.  

Communication

As mentioned, auditors need to be communicators. If they notice a problem with certain reports or have questions about specific sections, they need to be able to describe their concerns. This often means speaking directly to senior management to get what they need. An auditor’s communication skills can come in handy when they need to break down complex financial concepts into terms that the average person may understand. 

Analytical skills

Analytics doesn’t just mean reviewing numbers. It often requires people to add context to the information and provide actionable steps to improve any weak spots. Analytical skills also encompass problem-solving and critical thinking, which you need to decide on what actions are needed to improve a company’s financial health.

Breaking into the industry

Even with the desired skills, education and experience, there is no guarantee that you’ll be hired immediately as an auditor. It’s best to prepare as much as possible to potentially increase your chances of landing an interview in the industry. Here are some ways to do so: 

• Update your resumé: Include target keywords that people looking to hire auditors search for. Talk about your financial know-how and analytical skills. 
• Attend networking events: Look for general business marketing events and specialized meetups. The Institute of Internal Auditors and the American Accounting Association are two places to start. See if there are local chapters near you. 
• Work with local nonprofits: Volunteering your accounting skills can support your community and grow your network. Nonprofits often welcome financial help. Plus, this is a resumé-building activity that you can be passionate about. 
• Start as an accountant: If you don’t have a lot of financial experience on your resume, start in a lower-level accounting position. Within a few years, you can gain experience to help you become an experienced auditor. 

These steps can help you get a foot in the door and gain experience on your way to a role as an auditor.

How much do auditors make?

According to data collected by BLS in May 2021, auditors can earn a wide range of salaries. The bottom 10% of auditors earned an annual salary of $47,970 while the top 10% earned $128,970. Salary outlook often depends on the sector that auditors enter. An auditor in the insurance field or the private sector typically earns more than an auditor who works for the government. 

The field of auditing is also experiencing standard levels of job growth compared to other industries. BLS expects the field to grow by 6% from 2021 to 2031 — this equates to more than 136,400 jobs. 

Salary ranges are not specific to students or graduates of University of Phoenix. Actual outcomes vary based on multiple factors, including prior work experience, geographic location and other factors specific to the individual. University of Phoenix does not guarantee employment, salary level or career advancement. BLS data is geographically based. Information for a specific state/city can be researched on the BLS website.

BLS Occupational Employment Projections, 2021-2031 is published by the U.S. Bureau of Labor Statistics. This data reflects BLS’ projections of national (not local) conditions. These data points are not specific to University of Phoenix students or graduates.

Earn an accounting degree at University of Phoenix

If you’re interested in becoming an auditor or an accountant, discover how a degree from University of Phoenix (UOPX) can help. UOPX offers a Bachelor of Science in Accounting degree that prepares graduates with skills and knowledge to pursue a career as an auditor after graduation.

The program covers critical topics like auditing a company’s financial reports and electronic data processing systems, auditing standards, preparing financial statements, compiling documentation, using statistical tools and conducting liability assessments. Visit the University of Phoenix website to learn more about the program and how the University can help you save time and money on your degree.