You are probably atthat point of your life where you are at cross roads regarding what you want todo in the future, that is, your future career and how to get there. Well then,if you have a deep love for accounting or dream of becoming an auditor, this isdefinitely for you. You are probably wondering how you are going to fulfillthis dream. Follow these complete pointers to be that great and amazing auditoryou have always envisioned. Onyour quest to be an auditor, you have to ask yourself the big question; why doyou want to be an auditor? You may probably like the prestige associated withworking with the big four; Deloitte, PwC, KPMG and Ernst & Young. You maywant to be an auditor to be a hero, to expose scandals in big companies likeCynthia Cooper, the vice president of internal auditing who discovered thefraud at WorldCom.
Auditing encompasses more than this. According to ISA 200(International Standards on Auditing), auditing is defined in line with itsobjective of expressing an opinion, of the auditor, whether the financialstatements are prepared, in all material respects, in accordance with anidentified financial reporting framework. The first step to becoming an auditor isgetting trained and qualified but first you need a secondary school degree.Next, you follow these steps:Ø Getan Undergraduate Degree in Accounting. This aids early specialization as topicslike government loans and auditing are covered.
A piece of advice: complete aninternship; this gives you an edge in the business world.Ø Considera Graduate Degree. Most employers prefer individuals with graduate degrees.This may include being a Master of Business Administration, or a Master ofScience of Accounting. Also, it is advisable to focus on internal auditingalthough most schools focus on this.Ø BecomeProfessionally Certified. It is also advisable to gain some work experience andsome educational experience.
These are sometimes the examination requirementsfrom professional associations as they are common avenues to career advancementas an auditor. Although certifications are not required, they guarantee acertain level of competency. Also, choose the right certificate. (Auditor Training Programs and Requirements, 2018) You are probably wondering how you mightbecome certified.
This, as you may already know, requires planning and settingyour priorities straight. You need to let go of things that might deviate yourattention from the ultimate goal, which is being a certified auditor. InNigeria, You need to be a chartered accountant in order to be duly recognizedan auditor. This may take about three to four years depending on how focusedyou are. It is advisable to take the Association of Accountancy Bodies in WestAfrica (ATSWA) program which is offered in many universities. Also, gainingwork experience from top firms also eases some of the challenges mostindividuals face trying to be certified as you will already know the workingsof the industry.
You can also follow this complete guide if you wish to becertified an internal auditor:Step1: Find out which certificate is right for you. In Nigeria, the types ofcertificates include:Ø Certificationin control self-assessment® (CCIA)Ø CertifiedGovernment Auditing Professional® (CGAP)Ø CertifiedFinancial Service Auditor® (CFSA)Ø Certificationin Risk Management Assurance® (CRMA) Takethe above exams if you do not meet the CIA program education and experienceeligibility requirements. They are all one-part exams.
Although the mostglobally accepted certificate is theØ CertifiedInternal Auditor® (CIA) certificate. It is a three part exam.Thenext step is to find out if you are eligible to take the CIA exam. The requirementsto write the CIA exams are:Ø 3-4years university degree or 2 years post-secondary education and 5 yearsverified experience in internal audit or its equivalent, or 7 years verifiedexperience in internal audit or its equivalent.Ø Workexperience. Twenty four months’ work experience or a master’s degree cansubstitute for 12 of the 24 months.Ø CharacterReference signed by a CIA, CGAR or any other common auditing certificate holderor the candidate’s supervisor.
Ø Geta Proof of Identification. This could be an official current passport ornational identity card.You may be lucky enoughto have an ACCA certificate. This takes away the need to meet the workexperience or educational requirements.
In USA, educational requirements do notneed to be met if one has an Association of Certified Chartered Accountant (ACCA)certificate. Now, all you need to do is register and prepare for the exam bypracticing some past questions. Finally, take the exam and receive yourcertificate. (The Institute of Internal Auditors, 2018) Haven been certified a publicaccountant, you can now be called an auditor. You may wish to have a specialization,a branch of auditing you cherish most which you wish to be known renowned for.
I will later on present to you a comprehensive list of specializations you can gocrazy choosing from. Before we go on to that, remember that audititself is a specialized branch in accounting. There are two major areas ofspecialization in auditing. This simply means that you could decide to be aninternal auditor or an external or statutory auditor. Others aspects of audityou might wish to consider might include secretarial and compliance auditing,information technology auditing, quality management, project management auditing,water management auditing and energy conservation auditing. Auditing is so versatile that youcan practically work in any organization of your interest. You can work in verymany different industries like health or petroleum.
You could even feed yourcreative juices by working in a graphics or film making firm. As an internal auditor, as the nameimplies, you will be employed by the company or organization for which you areto perform audits. It will be required of you to provide information to theboard, managers, and other stakeholders of that firm on the accuracy of theirfinancial statements and the efficacy of their internal system. As an internalauditor, you can work in any of the businesses listed below:Ø Hospitaland Medical Centers: Ever felt likeworking for a non- profit industry that offers a great specialization forauditors? Luckily for you, all of the larger medical chains and centers have aninternal audit department and you could be part of them, if you aspire to.Ø HealthcareInsurance: If your careers of interest include finance and insurance, livingyour dream careers becomes a reality as the need for qualified and educatedinternal auditors in the healthcare insurance industry has been on the rise in theserecent years.
Ø LargeCorporate Businesses: Being an internalauditor also gives you the opportunity of working with large corporatecompanies as they have a large internal audit department. You will be saddledwith the responsibility of looking at the financial reports to ensure that theyare accurate and complete before the external auditors come in for theirindependent audit. Ø Collegeand Universities: These institutions are also a great specialization forauditors. This industry also has specialized rules and standards that areunique to the field. Your duties could include looking at internal controls andensuring compliance with established regulations including both financial andothers. However, if you feel that you are not cut out to be an internal auditor.
You have the option of becoming an external auditor. External auditors work in independentfirms engaged by the client, which are sometimes businesses. These businesses,subject to the audit, require an auditor to express an opinion on the company’sfinancial statements in order to detect frauds and errors. External auditors perform audits inaccordance with the specific laws or rules of the financial statements of acompany, government entity, other legal entity or organization. He isindependent of the entity being audited. As an external auditor, you must be amember of one of the recognized professional accountancy bodies, for example, theInstitute of Chartered Accountants (ICAN) which is the best known accountingprofessional body in Nigeria. External auditors normally address their reportsto the shareholders of the corporation. In the United States, certified publicaccountants are the only authorized non- governmental external auditors who mayperform audits and attestations on an entity`s financial statements and providereports on such audits for public review.
In the UK, Canada and otherCommonwealth nations, Chartered Accountants and Certified General Accountantsperform that role. As regards the other areas ofauditing aforementioned, Information Technology Audit, or Information SystemsAudit is an examination of the management controls within an InformationTechnology (IT) infrastructure. The evaluation of obtained evidence determinesif the information systems are safeguarding assets, maintaining data integrity,and operating effectively to achieve the organization’s goals or objectives.
Energy Conservation Audit dealswith the inspection, survey and analysis of energy flow for energy conservationin a building. Energy conservation focuses on the reduction of the amount ofenergy input into the system without negatively affecting the output. Thismight just be the area for you, if you have an interest in science. Haven gone through all these and after beingcertified an auditor, you may have to start as a trainee or a staff accountant,if you are just taking up a job in an external audit firm. It is very likelythat you yearn to be at the top of the firm with the “big boys”. You may haveto hold on to that thought, as getting there requires hard work and sacrificeas it may take years to get there. Below is a typical hierarchy of an auditfirm:Ø StaffAccountant: This is the first position you will be in when entering the charteredaccountant profession.
You will most likely perform the more detailed routineaudit tasks.Ø SeniorAccountant: also known as the supervisor. You can get to this position aftertwo or more years’ experience in public auditing. Your new duties will includebeing in charge of audit fieldwork. You will play a major role in conductingthe audit assignment of the client’s business. You will also supervise the workof the audit staff hence the other name of this position which is supervisor.Note that your work will be subject to the review and approval of the mangerand the partner.
Ø Manager:the work of the manager is to help the seniors plan their audit programs and toalso review and guide the work done by the seniors. He is responsible fordetermining the audit procedures applicable to specific audits and formaintaining uniform standards of fieldwork. Getting to this position requiresat least five years’ experience. You also need to be a whiz at tax laws,accounting standards and government regulations. You are mostly likely tospecialize in accounting if made a manager in the industry.Ø Partner:the last position and highest position in an audit firm and by no means theeasiest, the partners are the owners of the audit firm. Also known asdirectors, they are heavily involved in the planning of the audit, theevaluation of the results and determination of the audit opinion.
He may alsodelegate much work to the managers and seniors. Being a partner also gives onethe duties of maintaining contacts with clients, resolving controversies that mayarise and attending the client’s stockholders’ meetings to answer any questionregarding the financial statements or the auditor’s report. You finally becomethe person who makes the final decisions involving complex judgments. (Rick H, Roger D, Arnold S,Phillip W, 2005) Youprobably cannot wait to be an acclaimed auditor but getting there requires yougathering many years of work experience in one or many audit firms. You may noweven have the FCA title at the end of your name. After gathering some years ofexperience, give or take, four to seven years, you can now be said to beupwardly mobile in the audit field. Hold on though, you might want to take notethat you become more experienced every time you carry out an audit and ensurethe strict compliance of financial statements to international financialstatement standards (IFRS).
If after many years of hard work tobecome an auditor and some years of working as one, you become tired and bored ofyour job, bear in mind that you could go for a change of job content. Thiscould involve switching from being an internal auditor to an external auditoror vice versa. You could also switch from one industry to another. Let us sayfor example, you worked in a hospital as an auditor, you could move on toanother industry. This could be the entertainment industry if you wish to spiceup your job content. Bear in mind that auditing is not a static career whichrequires that you are either an auditor or are not. There are many careers inauditing and below is a list of them:Ø Advisory Ø AssistantAudit Manager Ø Assurance Ø AuditAssistant Ø AuditConsultant Ø Business/ Corporate AuditorØ ChangeManagement Ø Compliance& Regulation Ø CorporateGovernanceØ CyberSecurity Ø ExternalAuditor Ø ExternalAudit Senior Ø ExternalAudit Manager Ø ExternalAudit Senior ManagerØ ExternalAudit Partner Ø InternalAuditorØ InternalAudit Senior Ø InternalAudit Manager Ø InternalAudit Senior Manager Ø InternalAudit Head of Department Ø InternalAudit Director Ø InternalControls Ø ITAuditor Ø ITAudit Senior Ø ITAudit Manager Ø ITAudit Senior Manager Ø ITAudit Director / PartnerØ QualityAssuranceØ RiskØ Tax (CareersinAudit.
com, 2018) After going through some change ofjob content, you get to a certain place in your career where you decide thatyou want to practice independent of any audit firm. This idea probably strikesyour mind; starting your own audit firm. Realize that this might take you ahuge amount of effort and that you also need to put a lot of hard work into it.But before I get on into how you can start your own audit firm, you may need afew pointers from the histories of the big four audit firms in the world;Deloitte, PwC, EY and KPMG. Originally known as Deloitte ToucheTohmatsu, Deloitte is the top audit firm in the world. It rakes in overthirty-eight billion dollars every year. Founded by William Welch Deloitte,George Touche and Admiral Nobuzo Tohmatsu. William Welch Deloitte opened hisfirst office in 1845, at the young age of 25, opposite the bankruptcy court inBasingball street, London.
George Touche was known for his flair, integrity,integrity and expertise. He formed George A. Touche & Co. in 1899. Lateron, in 1900, along with John Niven, they set up Touche, Niven & Co. Theiroffices soon spread across the USA and Canada attracting a lot of clients.
Tohmatsu, who was certified a public accountant at the age of 57 in 1952. Youwould think his age discouraged him from pursuing his accounting dreams butthis late bloomer, formed along with Iwa Tomita, Tohmatsu & Co. He was eventhe president of the Japanese Institute Of Chartered Accountants. Deloitte wasformed when these three great companies merged. Ernst & Young also known as EY wasformed by Arthur Young, who had a great interest in investments and banking.This interest led him to form Arthur Young & Co. in Chicago, USA.
Ernst & Young was also formed by A.CErnst, a bookkeeper even in high school. These brothers started Ernst in 1903. They were the first to bring up the idea that accountinginformation could be used to make business decisions. As early as 1924, theyhad already allied with prominent British firms, Young with Broad Paterson& Co. and Ernst with Whinney Smith & Whinney.
In 1979, Ernst’s originalagreement led to the formation of Ernst & Whinney. In 1989, these two firmsmerged to form Ernst and Young. KPMG was formed in 1987. It was formed from amerger with a merger of Peat Marwick International (PMI0 and Klynveld MainGeordeler (KMG) and their individual member firms. The name KPMG was formedfrom the initials of the following names:Ø Kstands for Klynveld. He founded the firm Klyvend Kraayenhof & Co. inAmsterdam in 1917.
Ø Pstands for Peat. William Barclay Peat founded the accounting firm WilliamBarclay Peat & Co. in London in the year 1870.Ø Mstands for Marwick. James Marwick founded the accounting firm Marwick, Mitchell& Co. with Roger Mitchell in 1897 in New York CityØ Gfor Geordeler.
Dr. Reinhardt Geordeler was for many years chairman of DeutscheTreuhand-Gesellschaft and later chairman of KMG merger.In1987, Peat Marwick International (PMI) and Klynveld Main Goerdeler (KMG) andtheir member firms joined forces to form KPMG PricewaterhouseCoopers (PWC) was createdby a merger of Coopers &Lybrand and Price Waterhouse.
These individualshave roots dating back to 150 years. In 1865, Price, Waterhouse & co. wasformed from a partnership between Samuel Lowell Price. William H. Holyland and Edwin Waterhouse.
In 1854,William cooper formed Cooper brothers. In 1898, Robert H. Montgomery, William M.Lybrand, Adam A.
Ross Jr., and his brother T. Edward Ross formed Lybrand RossBrothers and Montgomery in Philadelphia.
In 1957, Cooper brothers & Co.(UK), McDonald, Currie and Co.(Canada), and Lybrand, Ross Bros, & Montgomery(US), forming Coopers & Lybrand. In 1990, Coopers & Lybrand merged withDeloitte Haskins & Sells in a number of countries around the world.
Finally, in 1998 Price Waterhouse and Coopers & Lybrand merged to formPricewaterhouseCoopers. (Rick H, Roger D, Arnold S,Phillip W, 2005) Going through all of these histories, youwill notice the following trends:Ø Startingan audit firm requires being a chartered accountant, especially one who is a hardworker.Ø Havea business plan-You have to draft a business plan for the firm and for thisplan to be effective the auditors should be able to:Ø Marketthe firmØ Holdthe firm to high standardØ Makesure the firm is doing it for the right reasonsØ Selectyour target market Ø Seekhelp of advisers when neededØ Hirethe right employees. You need to get appropriate staff.
You might want to alignyourself with the best professionals in the field. It is even better to be thedumbest one in your organization.Ø Youalso need to get your own name as this affects the branding of the company. Ifyou are already well known as a renowned auditor, naming your company afteryourself might just be a great idea.Ø Getyour own office. It is advisable to position in a strategic area where youmight get a lot of clients.
Ø Consideroffering more than one service to your clients. Most audit companies offer awide range of services which include auditing, accounting, tax management andconsulting.Ø Inthe long run, it is advisable to form a merger with other audit firms. Thisopens up your client base and gives you more sway in the business world. Towards the end of a successful career inaudit, it is important that you already have a retirement plan. Retirement isthat point where a person stops employment completely. As an auditor you shouldhave a pension plan. Some firms also pay their retiring workers a gratuity.
Ifyou eventually end up having an audit firm, you can receive dividends from thefirm even when you are retired. Being a partner also gives you the advantage ofbeing involved in the firm even after retirement. An audit firm also has a corporate socialresponsibility (CSR).
Firms such as KPMG organize debates for students. As anauditor, you could contribute to your society by enlightening your societyabout financial matters. Many auditors give career talks to students to sparktheir interests in accounting and auditing. Nowadays, auditors storm secondaryschools to give them accounting classes.
Accounting firms could also give awardsto successful accounting students. This form of encouragement and recognition couldspur them on to be the greatest accountants and auditors.