Role of Different Audit Accountants in A Company
Auditing is done to evaluate a person, organization, system, process, enterprise, project or product. Although auditing is a part of accounting, similar concepts exist in project management, quality management, and energy conservation as well.
To confirm the validity and reliability of information, audits are performed. Audits are performed to evaluate a system's internal control. The key objective of an audit is to put across an opinion on the person / organization / system in question, under evaluation on the basis of work done on a test basis. Because of practical constraints, an audit presents only reasonable assurance that the statements are free from material error. Therefore, statistical sampling is often adopted as a suitable method in audits. As in case of financial audits, financial statements are said to be true if and only if they are free of material misstatements - a concept considering both quantitative and qualitative factors.
Audit accountants of financial statements can be classified into two categories:
External Audit Accountant: An external Audit accountant is part of an independent Public accounting firm engaged by the client subject to the audit, to determine whether the organization’s financial statements are free of material misstatements. Material misstatements can be due to fraud or error. Publicly-traded companies hire external audit accountants to express their view on the effectiveness of internal controls over financial reporting. Although external audit accountants are engaged and paid by the company being audited, they are regarded as independent auditors. US GAAS of the American Institute of Certified Public Accountants and the ISA International Standards on Auditing developed by the International Auditing and Assurance Standards Board of the International Federation of Accountants are the most commonly used external audit standards.
Internal Audit Accountants: On the other hand, Internal audit accountants are employed by the organization they audit. Internal auditors perform various audit procedures to evaluate the effectiveness of the company's internal controls over financial reporting. Although internal auditors are not considered independent of the company they perform audit procedures for, internal auditors of publicly-traded companies need to report directly to the board of directors, or a sub-committee of the board of directors. Institute of Internal Auditors is the most commonly used Internal Audit standards.