Auditing

You have just been hired as a junior auditor for Big Boldov and Best (B3), a medium sized audit firm that has offices throughout the province. You share the good news with your friends and family. Your parents arrange a family get together to celebrate. While enjoying time with your family, your grandmother says: "That's wonderful, dear, but what do auditors do?

When answering, you should consider the following:

What is the purpose of auditing?

What role do auditors play in society?

What types of audits are there?

How do auditors differ from accountants?

Purpose

The purpose of auditing is to verify information prepared by one person for use by another person. The second person needs to reduce the risk that the information has errors or is false. Before they make a decision based on the information, they hire an auditor to check that it is reasonably accurate and complete.

Role

Auditors assume the social role of attesting (providing assurance) to published financial information, offering users the valuable service of assurance that the information risk is low. This improves the quality of information provided to capital markets and helps the markets efficiently allocate resources to organizations that will help grow the economy and improve standards of living.

Types

All public companies listed on the stock exchange must have their financial information audited. Many private corporations require audits for various users of their information. Public auditors may do audits of non-profit organizations including the government. Public sector audits are done to ensure compliance with laws, accurate reporting of expenditures and tax revenues, as well as value for money audits which help ensure that governments do not waste money. Lastly, internal auditors work within organizations to look for ways operate better.

Differences

All public auditors are accountants. They have to be since much of what they do is check the information...