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An auditor is a person or a firm appointed by a
company A company, abbreviated as co., is a Legal personality, legal entity representing an association of people, whether Natural person, natural, Legal person, legal or a mixture of both, with a specific objective. Company members share a common pu ...

company
to execute an
audit An audit is an "independent examination of financial information of any entity, whether profit oriented or not, irrespective of its size or legal form when such an examination is conducted with a view to express an opinion thereon.” Auditing ...

audit
.Practical Auditing, Kul Narsingh Shrestha, 2012, Nabin Prakashan, Nepal To act as an auditor, a person should be certified by the
regulatory authority A regulatory agency or regulatory authority, is a Public benefit corporation Public-benefit corporation is a term that has different meanings in different jurisdictions. In some cases it is the technical term used for a traditional nonprofit ch ...
of
accounting Accounting or Accountancy is the measurement ' Measurement is the number, numerical quantification (science), quantification of the variable and attribute (research), attributes of an object or event, which can be used to compare with other ob ...
and
auditing An audit is an "independent examination of financial information of any entity, whether profit oriented or not, irrespective of its size or legal form when such an examination is conducted with a view to express an opinion thereon.” Auditin ...
or possess certain specified qualifications. Generally, to act as an external auditor of the
company A company, abbreviated as co., is a Legal personality, legal entity representing an association of people, whether Natural person, natural, Legal person, legal or a mixture of both, with a specific objective. Company members share a common pu ...

company
, a person should have a certificate of practice from the regulatory authority.


Types of auditors

*
External auditor An external auditor performs an audit An audit is an "independent examination of financial information of any entity, whether profit oriented or not, irrespective of its size or legal form when such an examination is conducted with a view to e ...

External auditor
/
Statutory auditor Statutory auditor is a title used in various countries to refer to a person or entity with an audit An audit is an "independent examination of financial information of any entity, whether profit oriented or not, irrespective of its size or le ...
is an independent firm engaged by the client subject to the audit, to express an opinion on whether the company's
financial statements Financial statements (or financial reports) are formal records of the financial activities and position of a business, person, or other entity. Relevant financial information is presented in a structured manner and in a form which is easy to un ...
are free of material misstatements, whether due to fraud or error. For
publicly traded companies A public company, publicly traded company, publicly held company, publicly listed company, or public limited company A public limited company (legally abbreviated to PLC or plc) is a type of public company under United Kingdom company law, som ...
, external auditors may also be required to express an opinion over the effectiveness of
internal controlsInternal control, as defined by accountancy, accounting and auditing, is a process for assuring of an organization's objectives in operational effectiveness and Operational efficiency, efficiency, reliable financial reporting, and compliance with law ...
over
financial reporting Financial statements (or financial reports) are formal records of the financial activities and position of a business, person, or other entity. Relevant financial information is presented in a structured manner and in a form which is easy to und ...
. External auditors may also be engaged to perform other agreed-upon procedures, related or unrelated to financial statements. Most importantly, external auditors, though engaged and paid by the company being audited, should be regarded as independent. *
Internal Auditor Internal auditing is an independent, objective assurance and consulting A consultant (from la, consultare "to deliberate") is a professional A professional is a member of a profession or any person who earns their living from a specified pr ...
s are employed by the organizations they audit. They work for government agencies (federal, state and local); for publicly traded companies; and for non-profit companies across all industries. The internationally recognised standard setting body for the profession is the Institute of Internal Auditors - IIA (www.theiia.org). The IIA has defined internal auditing as follows: "Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes".


References

{{Authority control Auditing Accountancy occupations