What are auditors? Auditors are professionals often hated and misconstrued in the business sector, among government regulatory bodies, private accountants, and others whose work are checked.

What are auditors? Auditors are professionals often hated and misconstrued in the business sector, among government regulatory bodies, private accountants, and others whose work are checked. Auditors are the professionals who monitor the strict compliance of company and government policies and procedure. Auditors can be classified as internal or external auditors. 

What are Auditors’ Main Concerns?

External auditors are retained by the business and their fee is based on the number of hours they will spend on a certain task. Normally, the external auditors are the ones in charge of examining the books of accounts as part of the reportorial requirement of government regulatory bodies, owners, creditors and other third party users. After their examination, they will issue their “Auditor’s Report” whether the financial statements are fairly presented and conforms to the generally accepted accounting principles or GAAP.

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Internal auditors are hired by the company to examine strict compliance to company policies and procedures. They are also in charge in the investigation of fraud cases within the company. If internal auditors examine compliance to company policies and procedures, what the auditors are doing is the normal check and balance to safeguard the company against possible fraud. What are auditors doing in the normal sense are auditing the transactions of the company on a pre-audit or post audit basis. This is based on the company policy of what type of audit procedure to follow. 

What are auditors doing during pre-audit? 

Pre-audit of transactions means that auditors check compliance to standard internal control policies and procedures before every transaction is consummated. An example is that no check is prepared for payment unless the transaction was reviewed by an auditor and signifies his conformity by affixing his signature. This is a good internal control at first glance. However, if business transactions are voluminous, the burden of paper works rests on the shoulder of the internal auditor. 

What are auditors doing in post audit? 

During post audit of transactions, auditors examine the records after completion of the transaction to verify proper recording and account treatment.   

What are auditors’ favored methods of checking, a pre-audit or post audit? 

Each has its own advantages and disadvantages. In pre-audit, transactions are carefully checked before they are completed and errors are minimized. However, the auditor will be burdened with too much paper work. Conversely, transactions are carefully analyzed and monitored during post audit. The biggest setback is that errors are disclosed after completion of the transaction and the effect is usually unfavorable since damage has been done.  

Whatever the policy of the company in relation to audit of transactions, an audit becomes stronger if there will be inherent fraud prevention measures incorporated in the accounting system. What are auditors expected to do then? Auditors will now check compliance with the internal control measures to ensure that the fraud prevention features will work effectively.  

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