what is an external auditor?
As an external auditor, you review financial statements to ensure they provide a 'true and fair' picture of the company's financial position. By law, non-profit organizations and companies should conduct independent assessments of their finances. As an external auditor, you perform assessments and provide a detailed report to the stakeholders. You evaluate the books of accounts, financial statements, and disclosures to check for errors and fraudulent activity. Most employers hire external auditors to ensure their financial statements are free from material misstatements.
Working as an external auditor doesn't limit you to financial activity. Your job could involve checking if the company conforms to health and safety legislation or meets social responsibility standards. You provide an unbiased evaluation of whether or not the company meets its legal and voluntary obligations.
As an external auditor, you can work in various industries, ranging from manufacturing and retail to telecommunication sectors. You typically work in accounting or compliance departments in public companies, non-profits and private corporations. Some external auditors work for large accounting or auditing firms.
Your role requires exceptional analytical skills to evaluate financial statements and reports. Critical thinking and logical thinking are also useful for conducting independent assessments.
Would working as an external auditor suit your analytical and critical thinking skills? Then read on to find out what competencies and qualifications you need to thrive in an external auditor role.
external auditor jobsaverage external auditor salary
According to Job Bank, your average salary as an external auditor in Canada is $87,750 per year. The hourly earnings for the role are approximately $45. When you are new to the job or work in a junior position, you start with a lower salary, but with experience, your earnings gradually increase. Senior external auditors in Canada take home over $106,990 per year.
how to increase your salary as an external auditor
Your earnings as an external auditor fluctuate based on various factors. When you have minimal experience, you earn a lower salary due to the minimal expertise you bring to the role. With over five years of experience, your knowledge and expertise improve your earning potential. Having additional credentials and qualifications also boosts your earnings. When you have additional certifications, you can showcase your expertise and negotiate a higher salary.
As an external auditor, you can work in the private or public sector. When you work for the government, you are likely to earn less than external auditors working in the private sector. Private companies have significant revenues, are willing to pay more, and have additional perks.
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access our tooltypes of external auditors
As an external auditor, you can conduct the following types of audits:
- forensic audit: as an external auditor, you may conduct forensic audits as part of legal proceedings. In a forensic audit, you identify if any fraud took place and how the fraud was conducted. You prepare an audit report submitted to the court as part of evidence.
- statutory audit: in a statutory audit, you evaluate financial statements and prepare relevant audit reports as required by law or the local authority. For example, public companies are required by law to be audited by an independent external auditor. You ensure the company doesn't under- or overstate profits and the financial reports are accurate.
- financial audit: in a financial audit, you ensure the company adheres to International Financial Reporting Standards from the Accounting Standards Board (AcSB). Financial audits are used by management to determine areas of improvement and ensure compliance with government legislation.
working as an external auditor
Working as an external auditor is an exciting career if you enjoy working with numbers. Let’s explore the specific duties, responsibilities and work environments of external auditors.
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what does an external auditor do?
Some of the duties of an external auditor include:
- planning audits: as an external auditor, it is important to be familiar with the company procedures and industry for an effective evaluation. For instance, if you are auditing a manufacturing company, you should be familiar with how the industry works for proper planning.
- investigating financial information: you evaluate and assess accounting records or financial reports to check for completeness and accuracy. Your accounting knowledge helps you determine if the accounting principles and reporting standards were adhered to during the preparation of the accounts.
- performing audit procedures: if your job is to evaluate compliance with legal and social responsibilities, your auditing process is different from evaluating financial accounts. Hence, you set the scope of audit activities and the extent of the procedures based on the available time to perform the audit.
- maintaining communication with audit clients: as an external auditor, you communicate with clients and the company leaders throughout the audit process. Collaborating with stakeholders in the company helps you improve the audit procedures.
- documenting the audit process and preparing reports: as an external auditor, you present your findings to management through audit reports. When auditing financial accounts, you prepare reports that show the company's financial position.
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work environment of an external auditor
External auditors work in diverse industries, from healthcare facilities to manufacturing and consultancy firms. You work in an office setting, whether from your client's place of work or at a consultancy firm. You spend most of the day going through accounting information on a computer. Unless you are attending conferences or client meetings at offsite locations, the role involves minimal travelling.
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who are your colleagues?
Depending on the industry you work in, you work with accountants, finance managers and finance assistants. When working as an external auditor, you will also interact with accounts payable clerks and bookkeepers.
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external auditor work schedule
The typical work schedule of an external auditor is 40 hours a week. You work traditional office hours from 9 am to 5 pm, but you can expect a little overtime. For instance, during the tax season, you may work extra hours in the evening or on weekends. As an external auditor, you can work full-time, from Monday to Friday, or part-time, depending on your employer. Some companies also provide hybrid work settings or remote working opportunities for external auditors.
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career opportunities as an external auditor
You start your career as an accountant and gain the relevant certifications to become an external auditor. Your career progression doesn’t end there. You have numerous opportunities for career growth. For instance, you can take up senior roles in accounting or finance departments and become a controller, chief finance officer (CFO) or tax manager. Some external auditors become consultants for major corporations or financial advisors.
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advantages of finding a job as an external auditor through randstad
Working with Randstad offers you a range of benefits.
- Always a contact person you can fall back on and ask for help from
- Many training opportunities
- A range of jobs in your area
external auditor skills and education
Some of the educational requirements for being an external auditor include:
- bachelor’s degree: you need at least a bachelor's degree to become an external auditor. Consider pursuing a bachelor's degree in business administration, finance or accounting. After completing your university education, pursue professional accounting courses to become a Chartered Professional Accountant (CPA) or Certified Management Accountant (CMA).
- work experience and certification: you require extensive experience in accounting and finance to work as an external auditor. You also require a licence and membership with a provincial Institute of Chartered Accountants. For instance, in British Columbia, you can join the Chartered Professional Accountants of British Columbia, while in Alberta, you should register with CPA Alberta.
competencies and characteristics of external auditors
Some of the skills and competencies of external auditors include:
- communication skills: as an external auditor, you are expected to present your findings and audit reports to company leaders and stakeholders. You require excellent communication skills to discuss, articulate and explain your opinions clearly. Aside from verbal communication skills, you also require good writing skills to prepare reports.
- critical thinking skills: as an external auditor, you rely on critical thinking to analyze data and financial statements. Your critical thinking ability helps you interpret numbers and the company's reports without biases. You also provide actionable solutions to improve the company's financial reporting and revenue.
- technical skills: as an external auditor, you rely on accounting software and analytical platforms to evaluate a company's financial information. You require technical knowledge of operating systems and financial software to perform your duties efficiently. Your technical skills help you detect errors in financial statements and keep data organized.
- business acumen: as an external auditor, your role revolves around risk assessment and determining the accuracy of financial statements. Having business knowledge of the industry you are auditing improves your auditing process. You can use your business acumen to suggest areas of improvement and help the company navigate the changing business environment.
FAQs
Here, you will find the answers to the most frequently asked questions about the profession of an external auditor.
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what is the main role of an external auditor?
As an external auditor, you review and evaluate a company's financial statements to evaluate its financial status. You look through accounting information, from ledgers and sales reports to taxes, to ensure that reporting truly reflects the company's financial position. You also help the company spot internal oversight and unethical behaviour, such as fraud or embezzlement of funds.
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how much does an external auditor make in Canada?
Your earnings as an external auditor fluctuate based on your work experience and the size of the company you are auditing. Your average salary as an external auditor in Canada is $85,750 annually, which equals roughly $45 per hour. With extensive experience, your earnings gradually increase, and you can take home over $106,990 annually.
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is an external auditor a CPA in Canada?
Yes. To work as an external auditor in Canada, you should be a certified public accountant. Having a CPA designation shows the employer that you have the necessary training and experience, as you must pass a mandatory examination and gain relevant experience. External auditors also benefit from the periodic professional development available to CPA members.
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how do I become an external auditor?
You can start with a degree in accounting, finance or business if you want to become an external auditor. You should also fulfil the necessary professional requirements to become a CPA or CMA by completing the relevant examinations. With your educational qualifications, you can build your experience through entry-level accounting roles and internships.
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what’s the difference between an external auditor and an accountant?
An accountant compiles and prepares a company's financial statements by recording financial transactions and generating relevant reports. An external auditor investigates financial statements prepared by accountants to check for accuracy.
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how do I find a job as an external auditor?
Finding a job near you as an external auditor is easy. Search our job offers. Have you found what you're looking for? Then submit your application using the ‘Apply’ button top right on the page. No jobs available right now? Send us your resume and we'll pass it on to a recruiter who will contact you if an opportunity opens up for you.
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