Key Audit Skills: A New Frontier in Auditing

Data Analysis

When it comes to financial statements and reports, accuracy and legality are key factors. Businesses and individuals alike know the importance of keeping their financial records straight and in order for the sake of internal and external audits, among other reasons. But, what audit skills are required to ensure this is the case?

The range of audit skills required to fill an auditors role efficiently consists of a long list of hard and soft skills. Today, there are technology solutions like automation software that help to improve an auditor’s efficiency.

Let’s take a look at the skills of an auditor, external audit vs. internal audit, and how automation tools can help.  

Coming Up

1. What Does an Auditor Do?

2. Who Employs Auditors?

3. What are the Types of Audit?

4. What are the Skills Needed for Auditing?

5. How to Improve Auditing Skills?

6. How Automation Helps Auditing?

7. Wrap Up

What Does an Auditor Do?

An auditor is a specialist that is tasked with reviewing the accounts of companies to ensure that they are valid and legal. In some instances, an auditor may also serve in an advisory role to make recommendations about cost savings and risk aversion measures.

Auditors day-to-day tasks will vary, but some of their key responsibilities include:

  • Analysing data
  • Reviewing accounts and financial control systems
  • Ensuring financial reports are accurate
  • Identifying where processes have inefficiencies
  • Recommending updates for process improvement
  • Preparing financial statements and reports
  • Communicating with stakeholders and managers to review their findings
  • Reviewing wages
  • Evaluating levels of financial risk
  • Review financial reports to make sure are in line with accounting standards

After performing an audit, an auditor will present action items and recommendations to the organisation using their key audit skills. They may recommend amendments to internal control systems, reporting procedures, or processes with the goal of optimising a company’s performance and reducing costs.

Who Employs Auditors?

Auditors have many options for where they wish to work. They can either be employed within the accounting departments of organisations, or they can work with independent and certified firms.

Internal auditors can work in-house within the accounting department of an organisation, for an outsourced professional firm, or for large companies and charities. Internal auditors are typically found in private businesses and have the main goal of optimising processes or in large public or regulated companies.

Besides working on financial documentation and reviewing processes, internal auditors may be involved with reviewing a company’s ethical policies, environmental sustainability measures, reputation, and more.

External auditors can also work for private accounting firms or government agencies to execute mandatory audits for the public sector and governmental bodies. They may also need to review the finances of private businesses.

What are the Types of Audit?

There are more than a handful of types of audits in existence. Let’s take a look at some of them, as each relies on possessing audit skills to perform.

1. Internal audit

An internal audit is performed by someone within an organisation to help stakeholders and executives get a clear picture of the company’s financial status. Internal audits are typically commissioned to review: policy and legal compliance, operations, processes, and financing accounting, for example.

2. External audit

External audits are carried out by third parties where they review an organisation’s financial statements and reports to ensure they are in line with accounting standards and laws. In most instances, external audits are more complex to execute than internal audits.

If your organisation uses an automation solution, it can greatly alleviate an auditor’s burden by easily providing an audit trail and review of internal controls inherent in the system. Additionally, software solutions can process reconciliations and automate processes in an effort to streamline, achieve efficiency, and reduce errors.

3. Financial audit

A financial audit is focused on the financial status of a business. Auditors will review records, from expenses to investments to assets and revenue. These audits are typically performed to provide a review for investors and shareholders.

4. Operational audit

An operational audit is aimed at reviewing an organisation’s operations, including goals, culture, policies, and procedures. The goal is to spot inefficiency and areas ripe for process improvement. For example, automation tools can improve approval processes and remove key person dependency.

At the same time, solutions with advanced analytics can help to pinpoint areas that can be improved or steps within the process that can be removed.

Additional audits include: compliance audit, information system audit, pay audits, forensic audit, payroll audit, statutory audit, tax audit, and more.

What are the Skills Needed for Auditing?

Auditors need to possess a wide range of hard and soft skills, regardless of where they are employed. The nature of the job demands high attention to detail, financial and business acumen, and immense integrity.

Let’s review some of the necessary skills of an auditor.

1. Communication skills

As with any job, communication skills are a must. When it comes to auditing, this skill sits near the top of the list because an auditor must be able to succinctly convey their thoughts, suggestions, and ideas to stakeholders, employees, investors, and the like.

Not only do auditors get to make suggestions that can reshape an organisation, but they must also be able to present their findings in an easily understandable manner. That’s why communication skills are ranked almost as highly as technological skills in this realm.

2. Critical thinking

Critical thinking can be thought of as the use of logic to find solutions. When auditors review a company’s records and statements, they have to be able to understand what the full picture is. Since their solutions and recommendations can be used to transform a business for the better, critical thinking plays a key part in their work.

3. Analytical skills

Luckily for auditors, technology has made analytics easier than ever. They are many software tools that can perform advanced analytics and provide visual insights at the click of a button.

However, that’s not to disregard the need for human analysis, as well. Auditors can draw conclusions and review automated reports to aid in improving a business’ processes.

Rather than having to dig through a variety of disconnected systems and tools, auditors can benefit from the power of automation tools that connects all systems together, including legacy systems.

This makes it possible to pull together data, run reports, and gain greater insights with the use of advanced analytics (which can help companies spot and remedy risks sooner).

4. Organization

The job of an auditor is replete with data and small details. As such, it’s important to keep everything organized and easy to find. Organizational skills also play a role in time management, which is key for an auditor as there are often deadlines involved in their work.  

5. Integrity

Given the fact that auditors deal with sensitive data, including a review of a company’s financial health, it’s common for there to be pushback or disagreements within the process. A must-have quality for auditors is integrity.

They have to remain objective even when dealing with people whose emotions may be heightened given unfavorable audit opinions. In order to remain honest and stand their ground, auditors have to possess resilience and integrity.

6. Teamwork

Auditors don’t always work independently. In many instances, they’ll have to work with teams or other financial professionals, so a collaborative mindset is useful.

If they are external auditors, they’ll also have to work with various teams and individuals within the client’s organisation.

7. Business acumen

Auditors have to have a strong hold on the overall business environment that a company operates within, as well as a strong grasp on accounting standards and regulations. They need to be able to understand complex and highly technical processes, document them and identify any associated risks.

8. Curiosity

Auditors work best when they have a certain level of professional skepticism, which means that they are inclined to ask questions. For example, if an auditor notices financial fraud, then they’ll have to dig into how the culprit could have gotten past the company’s internal controls. They’ll also need to be creative in finding solutions to protect an organisation from future threats.

9. Empathy

Although it’s a bit less obvious than the aforementioned skills, empathy is a key trait for auditors. Many in finance are already bogged down with the tasks that are already on their plate.

As such, being audited adds extra work to a finance team that already is lacking time. An automation tool can relieve much of this pressure because it automatically provides audit trails, streamlines approval processes, and connects data from various systems.

With an automation tool in tow, an auditor can simply receive the documentation they need, and the finance team can carry on with their high-level tasks. All the while, the best auditors are able to understand their client’s emotions while they objectively carry out their responsibilities.

10. Initiative

Auditors, especially internal auditors, should have a high level of initiative. They should always be looking for ways to improve a company’s operations and financial success. There’s also the option to continue expanding one’s professional skills through certifications and professional development programs.

How to Improve Auditing Skills?

Even if you’re already working as an auditor, there are always opportunities to enhance your skills. Some ideas to improve your audit skills include:

  • Read trade publications: Subscribe for industry news and updates
  • Be an active listener: Concentrate on what the other person is saying rather than thinking about what you are going to say next  
  • Question your own perspective: Think of the big picture, rather than thinking of small solutions at each step
  • Volunteer for leadership roles: Take on more tasks and step into leadership roles within or outside of your job
  • Obtain certifications: Professional certifications can boost your resume and increase salary potential
  • Enroll in professional development programs: There are online or in-person options to do so
  • Utilise automation solutions: Get comfortable using financial automation systems as most organisations have implemented automation

How Automation Helps Auditing?

Automation solutions make internal and external audits significantly easier and less time consuming for finance and the company as a whole. Automation software can connect data from many systems and analyse massive amounts of data in seconds, removing the need for manual checks and tedious work.

This reduces the auditor’s time with a more streamlined audit and reduces the finance team's time so it can be spent on analytical tasks rather than low-level and repetitive data tasks and reducing auditors questions.

Additionally, automation solutions can provide advanced analytics to review internal processes and help spot inefficiencies. The software can be programmed to generate reports and automatically send them to relevant parties, thereby removing the responsibility of doing so from the auditor’s hands.

Through the use of automation solutions, human errors are prevented and the overall accuracy of the audit is greatly improved. Some use cases include: financial reconciliations, invoice processing, entering data, running payroll, onboarding customers, and more.

Wrap Up

As you can see, audit skills are wide-ranging. The role of an auditor is extremely pivotal in big and small organisations alike, and for public companies, audits are regulated and recurring. The importance of accurate financial data cannot go overlooked.

Financial automation solutions can improve the audit process, save time, improve data accuracy, and reduce process risk. Ultimately it ensures that your company’s data and financial reports are in line with accounting standards, accurate, and reliable.

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