Foremost, what is an auditor? By definition, it is an individual that is responsible for evaluating some aspects of a project, business, or individual. An auditor accumulates and evaluates evidence to report on the degree a company’s assertions comply with an established set of procedures or standards (criteria). The auditor is expected to perform an unbiased evaluation. An auditor may be an internal auditor (an individual whose primary job function is to audit his or her own company) or an external auditor (an independent individual from outside the company, who typically is employed by an auditing firm who handles different clients) – InvestorWords.com.
But hearing the term “Auditors” usually correspond with fear to an individual or to an organization. They are often described as the skeptic people who examine to verify frauds and other irregularities in an organization. A common response from an individual is “have I done something wrong? And to an organization is “are we out of compliance and out of control?” There is that concept that auditors are merely using observations to lay blame for wrong actions. Well, to tell you that state of mind is too traditional.
In contrast, Auditors takes a progressive and avant-garde mindset that can help identify problem so that it will be corrected now and could be avoided in the future.
Here are 3 main reasons why big or small business owners should listen to their auditors:
1. Professional Qualification and Expertise
They are individuals qualified at the state level to perform audit. They use the title Certified Public Accountant (CPA), Certified Internal Auditor (CIA), or Certified Information Systems Auditor (CISA) that are regulated by law and standards. Individuals using this designation are licensed in the state they practice auditing.
They are hired to conduct an examination of the records to form an opinion about the authenticity and correctness of such records by verifying the correctness and reliability of the recorded transactions from the evidences available, opinion and inference reachable based on their expertise.
Auditors can form a different perspective than yours and may be able to discover possible problems and opportunities for improvement that business owners may have overlooked. An auditor can plant the seeds for improvement by sharing with you the different ways of doing things that he may have seen at other facilities.
2. Honesty and Integrity
The word integrity implies complete honesty together with strength of mind. Being bound to comply with the Code of Ethics, auditors are considered tactful and scrupulously honest. They possess the qualities of withstanding and resisting the influence in the course of discharge of his duties. He will never compromise his principles without being rigid in his attitude.
3. Independence and Fairness
Auditors are like referees within the reporting arena. Business owners that have their audits been completed will have a pleasant result and they know that an independent audit report will add credibility to their financial reports, internal control system, and other business related reports.
It is true to some point that there are some auditors who usually fit the traditional meaning of it and, further, nobody likes to be criticized. However, whether you appreciate it or not, you can have a significant impact on the result of any audit, examination, or assessment that you are subjected to if you decide up front to make it work for you rather than against you.
So the next time your auditor submits his or her audit report, make sure to pay attention to it. Auditors also submit management letter or internal control letter. This letter includes the auditor’s findings, issues, concerns, and suggestions noted during the examination. This communication letter should be given attention so as to reduce the company’s internal control risk, to protect its assets, to make its organization structure more effective and efficient, and to possibly reduce cost for the succeeding audits.