One of the major functions in every company is accounting. All organizations employ professionals to operate in finance department which involves organization of a company’s financial transactions in a systematic and comprehensive manner. Accounting is a broad field that provides all those interested in it a range of careers to choose from such as management accounting and auditing.
Management accounting, which is also known as corporate accounting, involves all financial and accounting activities necessary for a business operation. It also involves directing of internal financial processes such as monitoring of a company’s expenses, transactions, and payments; conducting inspections to know the industrial trends and forecasting future needs; as well as offering assistance to company’s leadership on financial decisions (Index, 2012). This accounting field requires that its professional have knowledge on managing risks, planning of budgets, and scrutinizing financial data for effectiveness.
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Auditing involves reviewing the company’s financial documents to ascertain the accuracy and company’s compliance with law and regulations as well as reviewing of a company’s information technology system used to store and maintain data to ensure its security (Index, 2012) . A company can conduct either an internal audit or external audit. During an internal audit, auditors from public accounting firms are contracted to perform an audit in outside companies while during an internal audit, an auditor is employed by the organization to perform auditing in the organization.
Employees who are in a position of certified internal auditors monitor a company’s financial records for accuracy. Auditors in all organizations either public or private have the responsibility of examining the financial records to ascertain accuracy or mismanagement, observing the industry trends the company belongs to, tracking of the revenues and expenditures, as well as making efficiency recommendations on how to improve the company’s operations especially the information technology system. Auditors combine both their accounting information and knowledge on computer technology to review the information technology management in the company.
Generally, internal auditors’ responsibility in an organization is to detect and prevent employee fraud which includes skimming payments from customers, tampering with checks, improper payroll transactions, and embezzlement of funds as well as misuse of a company’s credit cards. They help a company make a step toward growth by eliminating all means of resource wastage in the company. Also, auditors monitor the internal control by examining the policies and procedures in the company so as to reduce its exposure to threats of losses. This function of the auditors helps a company to formulate policies that can be adhered to. All policies formulated in an organization have to be tested for compliance during auditing to ensure that they are followed.
Operating auditing examines company’s operations to ensure efficiency. This audit points out inefficiency among the employees and the practices that are not necessary for the company. By increasing efficiency, a company reduces its overheads hence increasing its profits.
For one to be a certified internal auditor, they are required to have a degree in accounting, financing, or business management. Auditors need to have integrity, good communication skills, relationship building skills as well as diversity (Yankova, 2015). Teamwork in auditing helps auditors to get along with the employees throughout the auditing process. However, one can also advance and become a senior internal auditor which provides them with an opportunity to be managers, supervisors or even partners in accounting firms. Alternatively, some auditors start their own consultancy firms.
References
Index, C. P. (2012). Bureau of Labor Statistics, US Department of Labor. Washington, DC. Available online from URL: http://data. bls. gov/cgi-bin/surveymost/(Accessed Aug. 14, 2006) .
Yankova, K. (2015). The Influence of Information Order Effects and Trait Professional Skepticism on Auditors’ Belief Revisions: A Theoretical and Empirical Analysis . Springer.
