Audit firms look errors in accounting. The also look for signs of fraud, embezzlement, and money laundering. When your company is big enough to draw a lot of attention, auditors become a big part of your operations. There are three kinds of auditors, too. They are listed and defined as follows.
An internal auditor is someone who works for you. He or she spends countless hours pouring over every transaction your company makes and has made. Every entry in a log book or accounting software is scrutinized, errors found and corrected, and the process goes on and on until you go bankrupt, sell the company, or leave the company to someone else. New owners may opt to keep your internal auditors on payroll, or hire external auditors.
An external auditor does everything an internal auditor does. However, an external auditor does not work in your company and only works on an as-needed basis. An external auditor may also work for the government or an investigative department, in which case he/she will have immediate access to all of your financial data, with or without your permission.
An IRS auditor is an example of an external auditor who works for someone else, and not for you. If an IRS auditor is auditing you and your company, the IRS will send you a notice by snail mail that provides you with a date and time the auditor will show up at your office. You are expected to present this auditor with the current financial data and records for your company, as well as the last ten years' worth of income tax filings and related documents. If you have not yet been in business ten years, then you will be expected to provide all documents, data, and tax files for all the years your company has been operating.
Other Names Auditors May Be Called
Auditors who do not work for auditing firms may be called accountants, forensic accountants (when white collar crime is suspected), and/or may work for accounting firms or work as independent accounting consultants. If you want to hire an internal or external auditor, and you cannot seem to find one in your area, look for a professional under the previously mentioned professional titles. You can always find an accountant or an accounting firm as everyone needs these professionals during tax season. Individual accounting consultants will advertise.Share