How to Become an Auditor
Essential Education, Skills, and Job Interview Prep
Crunching numbers and making sure that all reports are accurate is a huge responsibility for an auditor. If you are aiming to be an internal auditor for a firm or personal practice, then this guide on how to become an auditor is made for you. Find out what you need to prepare, and the specific steps to take if you want to succeed in the auditing field.
What Is an Auditor?
An auditor is an accountant with an additional layer of responsibility, which is to investigate the accuracy of financial reports. For the most part, auditors do internal auditing of a certain firm’s financial statements and accounting processes.
It is important to remember that auditors do not prepare financial statements. Rather, management would prepare the statements and it is the auditor’s job to check them. Auditors can also advise management on how t reduce costs and make more money.
Auditor Salary and Job Outlook
The US Bureau of Labor Statistics (BLS) reports that an auditor earns a median salary of $73,560. The highest-paid auditors earn $128,680 and above. Usually, these are audit managers and auditors with many years of experience.
According to BLS, available jobs for internal auditors will increase by four percent by 2029, in line with the average for all occupations. This translates into 125,700 job openings annually. However, while there are a lot of openings, competition is also tight among applicants.
Entry-Level Auditor Job Requirements
The average entry-level auditor makes $53,261 per year according to PayScale, with the base salary ranging from around $43,000 to as much as $83,000 per year. To qualify as an auditor, you need to have finished a degree in accounting.
Auditors in the United States are not necessarily required to obtain a Certified Public Accountant (CPA) license. However, most firms nowadays require their employees to take the exam. So it makes sense to ace the assessment as early as you can because this could open a variety of career options for you.
How to Ace Your Auditor Job Interview
Auditor job interviews focus on the technical aspects of the job. Aside from the general questions asked during interviews to gauge your personality, you need to be able to demonstrate your knowledge of the role to immediately leave a good impression.
Below are some common interview questions for you to consider.
Common Auditor Job Interview Questions
- What is an internal audit, and what are its processes?
- What do you think is your most important responsibility as an internal auditor?
- Why is an internal audit necessary?
- Was there a time when you committed an error while auditing? What did you do to resolve it?
- How would you describe your relationship with clients and the way you communicate with them?
What Degree Should I Get to Become an Auditor?
Being an auditor is a straightforward and technical job. There is only one way to become an auditor and that is to study accounting. From undergraduate degrees to advanced studies afterward, accounting is the only relevant field of study for aspiring auditors.
Associate Degree in Accounting
An Associate Degree in Accounting is a good way to get an overview of how accounting works. The focus will be on accounting principles as these are the backbone of the accounting process. An Associate Degree in Accounting helps you prepare for your future in the accounting field of study. Typically, this degree takes two years to complete.
Bachelor’s Degree in Accounting
A Bachelor’s Degree in Accounting is the minimum requirement for most auditors. An accounting degree should prepare you for a life as an auditor as this is where you will learn the basics, rules, and principles of accounting.
It will usually require four years of study to gain this degree. On completion, you may either take the CPA exam or continue to a master’s degree.
Master’s Degree in Accounting
A Master’s Degree in Accounting involves advanced studies and practices. Here, you can take up a specialization that you want to focus on. The special fields of study include taxation, financial statement analysis, and even forensic accounting. Expect to study for one to two years to add this degree to your resume.
Accounting Doctoral Degree
A PhD in Accounting is usually taken by people who intend to delve into research and advanced studies. This is the highest educational level that you can attain. You are expected to have a deep knowledge of different accounting fields as this involves in-depth research work. You may study for between four to seven years to gain this qualification.
What Does an Auditor Do?
Your job as an auditor is mainly to examine financial statements and records to check for their accuracy. You will handle a lot of financial data that would be coming from the firm, and it is your responsibility to ensure that the report is clean and honest.
Examines Financial Statements
You need to make sure that the financial statements of the company are reflecting true and accurate data from its transactions. Each transaction should be accounted for, with proper documentation. You also need to make sure that the financial statements are presented in the correct format.
Examining these financial statements is also about making sure that they are compliant with the requirements of the laws and regulations. You must be rigorous in checking the declared taxes to prevent getting in trouble with the tax authorities.
Inspects Accounting Books and Systems
Part of your job as an auditor is to also check a firm’s accounting books and accounting system. The books hold the transactions of the company in the past year. Examining the books is one way to check where the funds are coming and going.
By examining the books, you are also evaluating the accounting system of the company. You have the responsibility to make sure that there are no fraudulent activities hidden behind each transaction. This way, you are also helping the firm to properly maintain its financial records.
Provides Advice on Financial Operations and Risk
As an expert in the field, the firm would also expect you to provide advice on how to run the business. Since you are investigating the financial statements and examining accounting books and systems, you have a perspective on the firm’s processes.
With this, you are expected to give advice on how to improve financial operations and minimize financial risks. You can also give suggestions on how the firm can reduce costs while gaining more profits and revenue.
Essential Auditor Skills
To start an internal auditor career, you must have top-notch investigative skills since your work involves identifying any mistakes. Auditors follow standard routines, so whatever skills you practice and master now will still be relevant and important in the long run.
Excellent Problem Solving
As you are investigating financial statements, it is likely that you will encounter all kinds of issues and problems. With this, you should be able to provide solutions to companies on how they can improve their financial statements.
Part of your work is to also guide the company to minimize risk and maximize their revenue. For example, if a company’s financial statement does not look optimal, you can help identify which specific aspect to improve on.
Awareness of New Rules and Regulations
Accounting rules and regulations change from time to time. As an auditor, you should be able to monitor and adapt to these changes. It will be your responsibility to make sure that your clients are aware of new requirements and that they follow through.
This skill would be a great help in making sure that you are following internal audit standards. It is a way to enhance your awareness when it comes to fraud and potential ethical violations of fiscal reporting.
Good Communication Skills
You need to have consistent and strong communication with your clients to be a successful auditor. If you have any concern with their reports, you need to be able to comfortably talk it over with them.
You should be open with your client because you need to work together to guarantee the company’s sustainability. This in turn will earn a client’s trust in your ability to help them succeed.
How to Become an Auditor:
A Step-by-Step Guide
The best combination to guarantee success to become an auditor is to complete a degree in accounting and pass the CPA exam. Being an auditor is a demanding job because it deals with a lot of rules and regulations. To make sure that you can easily achieve your dream of becoming an auditor, below is a step-by-step guide that you can follow.
Complete a Bachelor’s Degree in Accounting
Completing a Bachelor’s Degree in Accounting is the first step to take. This is where you will learn the technicalities of accounting, including the preparation of financial statements. You will also learn the principles of accounting and other relevant topics.
While you can still become an auditor with a non-accounting degree, it would still be better to take accounting from the start. You could waste a lot of time and money going from one degree to another or taking additional classes just to learn more about accounting.
Apply for Internships in Public or Private Firms
Internships are important because this is where you will learn the practical side of accounting. In classroom sessions, you will mostly deal with the theory. Working outside, whether as part of your program requirements or in a voluntary capacity, is your chance to get to know how accounting works in the real world.
Applying for an internship could also be advantageous for you because your firm might eventually offer you full-time employment.
Study for and Pass the CPA Exam
Study for the CPA exam to earn a license. Most firms nowadays require that an auditor pass the CPA exam to practice internal auditing. This gives both you and the company a certain level of credibility to earn the trust of the clients.
You can study for the CPA exam right after completing your bachelor’s degree, or while you are already working for an accounting firm. Either way, passing the CPA board exam would be advantageous to your career growth.
Take Classes to Learn New Skills
Despite being fairly routine, accounting continues to grow along with the changing times. Accounting is closely tied with technology to automate certain processes. So, you could learn new skills in data analytics, economics, or information technology to help your processes.
You do not need to enroll in a university to gain an understanding of these disciplines. There are bootcamps and educational platforms that offer courses in the fields of data science and IT. You can enroll in these programs on a part-time basis while working.
Consider a Master’s or Doctoral Degree
If you would like to further your competence as an auditor, you can enroll in advanced studies. A Master’s Degree in Accounting can be taken right after your bachelor’s degree if you are not prepared yet for the CPA exam. You can also take it after you have passed the exam or while already working.
Furthermore, a doctorate in accounting is also a good step to take if you are into research. You can also make use of this degree if you are interested in teaching and becoming a professor of accountancy and auditing.
How Long Does It Take to Become an Auditor?
It takes around four years to finish a bachelor’s degree in accounting, depending on your university’s program and your own progress. You can then study for the four-part CPA exam. According to the American Institute of Certified Public Accountants (AICPA), you have 18 months to complete all four parts. So, it takes about five-and-a-half years to fully qualify.
Should You Become an Auditor in 2021?
As mentioned previously, more auditor jobs will continue to be available in the coming years. The competition is tough, but as long as you have exceptional skills and knowledge, you can achieve your goal.
In 2021, becoming an auditor is still as relevant as ever. Though classes are mostly taken in person, accounting subjects can also be taught with ease via online sessions. Now is as good a time as any to jump into this stable profession.
What is the minimum education requirement to become an auditor?
You need to at least earn a Bachelor’s Degree in Accounting to become an auditor. Through your degree, you will pick up the most essential skills and knowledge that you need to become a reliable auditor. The bachelor’s degree is your foundation and where you will gain a broad spectrum of key skills.
Is a CPA license a mandatory requirement to become an internal auditor?
While there are certain companies that do not require you to be a CPA, the majority of firms would prefer that you have a license. Moreover, having a license establishes your credibility and reliability as an auditor. Therefore, it would be better to take the CPA exam as soon as you can.
How long does it take to study for the CPA exam?
According to AICPA, you have about 18 months to study for and complete the CPA board exam. There are a total of four CPA exams that you need to pass.
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