Auditor Skills: Definition, Examples and How To Improve

By Indeed Editorial Team

Published November 9, 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Auditor skills refer to the expertise used to complete an unbiased inspection and analysis of a company's financial statements. The purpose of an audit is to gain a professional opinion of how the company's financial statements reflect the company's overall financial position. Understanding the different types of audits and how a company can use an audit to make improvements can help you ensure the accuracy of accounting books and processes. In this article, we define auditing skills, list the different types of audits, and suggest strategies you can use to improve your skills as an auditor.

What are auditor skills?

Auditor skills are the abilities of a professional auditor to provide a trustworthy opinion and examination of a company's financial statements. Aside from having excellent analyzing skills, auditors have a wide range of abilities that contribute to the quality of professional output. Here's a list of the important skills for an auditor:

Communication

Auditors with excellent communication skills can discuss, articulate, and relay their opinions and reports to company leaders more clearly. Companies hire auditors to explain complex topics and discuss potential improvements and accounting information with members of a company. Auditors communicate with clients and coworkers verbally and in written form, so proficiency in both can improve the quality of the audit.

Related: How to Become a Chartered Accountant: Definition and Steps

Critical thinking

Critical thinking is a term that refers to using prior knowledge and logic to analyze and make a judgment or decision. Thinking critically is an important skill for auditors to use when they analyze data, read financial statements, and interpret numbers and companies' processes with an unbiased opinion. Critical thinking skills can help auditors observe information with a logical approach. An auditor can use this skill to suggest actionable solutions to improve the business' finances.

Empathy and understanding

Working with a sense of empathy when providing a service for a company can help you understand the company's goal of making sure taxes are correct and accounting systems are accurate. Identifying financial discrepancies from the audit is a learning experience for the company and may be difficult to navigate as an employer. An auditor can use empathy to get all the information they need from different units and establish trust with the employees they interview.

Business knowledge

A successful auditor may use their business knowledge to develop an accurate analysis and assess risk, understand special processes and information, and identify the key people related to managing resources. Actively learning new information about an industry can help auditors identify additional concerns and calculate solutions to unforeseen issues. Auditors can use their business knowledge to discuss the client's financial statements, protect businesses from fraud, and understand how potential changes in the market can influence business dynamics.

Technical skills

Technical skills for auditors include data analysis, technical writing, and knowledge of operating systems and financial software. Combining technical knowledge and critical thinking can help the auditor detect errors more efficiently. Auditors with technical skills can also recommend communication platforms and data analysis tools to share information clearly and keep sales data organized.

Read more: Technical Skills: Definitions and Examples

Organization

Organizational skills can help the auditor coordinate tasks and improve time management. These abilities may help auditors concentrate on the client's financial data and investigate potential instances and effects of fraud. Organizational skills can also help auditors evaluate procedures and develop a service organization controls report on security and process integrity.

Initiative

An auditor finds solutions to financial conflicts and provides an opinion on what changes a company can make and balance their finances. Taking the initiative to identify errors and investigate their causes can provide a company with a more valuable financial summary when the audit concludes. Auditors can take initiative by asking the client questions about their documents and request information that you think can help your analysis.

Collaboration

Some audits require teams of multiple members to work together, which makes developing collaboration skills an important aspect of creating an effective audit. Performing tasks with company members and working together with a group of different experts can establish a more efficient process and lead to a more exhaustive audit. Auditors collaborate with company managers and an audit committee to ensure practices comply with Canadian accounting standards.

Self-management

Self-management is a learned competency that refers to how one manages their emotional state, resources, time, and responsibilities. Self-management requires patience, knowing when to complete tasks, and preparing strategies you can use to complete assignments. Auditors can improve self-management skills by setting goals at the start of a project and focusing on the accuracy of the report.

Read more: Self-Management Skills (Definition and Tips Included)

Creativity

Creativity throughout the audit may help you use different approaches to identify emerging risks. Risk assessment can benefit from creative thinking when auditors investigate transactions and identify suspicious patterns. Being creative is also valuable for auditors deciding on what the most applicable analytical procedure is, and when searching for discrepancies in a sample.

Read more: 7 Steps to Improve Your Creative Thinking Skills

Types of audits

Different types of audits have different purposes and require unique skills for each. Remaining flexible throughout the process and knowing how to apply your skills to each type of audit can help keep performance and quality consistent. Here are the main types of audits that companies use to evaluate their financial statements:

Internal audit

An internal audit evaluates a company's accounting processes and internal controls to improve risk management and operations. An internal auditor can help identify liabilities and discover ways to mitigate financial loss. Internal auditors also advise company leaders on how they can improve their systems and execute tasks more effectively.

External audit

An external audit evaluates the accuracy of the company's accounting with the aim of stating an opinion regarding the company's finances. Companies usually hire external auditors to conduct an audit once a year. External auditors also ensure that the company complies with business regulations and laws and emphasizes a company's financial state and trajectory.

Payroll audit

A payroll audit is an examination of payroll records to ensure that the company or business complies with taxes, business laws, and labour standards and regulations. A payroll auditor considers active employees and wages to evaluate the accuracy of compensation records. This type of audit can confirm accurate tax withholding and remittance, and verify reports on payroll deductions.

Compliance audit

A compliance audit determines whether a company or business complies with government rules, standards, and procedures. For example, an electronics store can undergo a compliance audit to determine if they are disposing of e-waste according to government standards. A compliance audit also helps parent companies discover if subsidiary companies are complying with their norms.

How to improve your auditing skills

Improving your auditing skills starts with understanding your strengths, weaknesses, and areas that you want to develop. Use the list of skills above to identify which areas you might consider. Here are some ways that you can improve your skills:

1. Take notes

Auditors communicate with managers and employees to determine the accuracy of the company's records. Auditors can take notes when they interview members of a company to monitor relevant information so they can use it to assess accounting records. Taking notes can help the auditor identify discrepancies between business procedures and documentation.

2. Subscribe to business magazines

It's important to be knowledgeable about business practices and methods, trends, and technologies so you can use your expertise to establish client relationships and complete quality work. Auditors can subscribe to a business magazine online or using a mail-in subscription program for the latest news, events, and innovations in the industry of your choosing. You can also access similar news on social media pages and business websites for different companies.

3. Practise active listening

Auditors can practise active listening by focusing on the speaker's words while paying attention to facial expressions and other verbal or non-verbal cues. During interactions, consider what the speaker is saying and allow them to complete their comment or question before you reflect on their words and respond. Engage in active listening in any interaction and gain more valuable information related to the company.

Read more: 9 Ways to Improve Your Active Listening Skills

4. Consider new perspectives

Consider new perspectives by talking to other auditors about what strategies they use to complete an audit and communicate with clients. Your method for self-managing and completing a successful audit can differ from other approaches. Talk to other professionals in your field to help maximize your efficiency and improve the quality of your work.

5. Practise writing

Practise writing skills by enrolling in a writing course or by creating a writing routine in a notebook or journal. Auditors write progress logs, send auditing reports, and communicate with clients and teammates by email. Practise your technical writing skills by keeping a journal or specified document for personal and professional writing. Instructors and classmates from writing courses can give you feedback on your work and help you find areas to improve.

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