According to the American Institute of Certified Public Accountants, the objective of a financial statement audit is to give its users — shareholders, creditors, investors, etc. — an affirmation that an entity’s financial statements are equitably presented and comply with the general financial reporting framework. At the end of the audit, the auditor will express an opinion as to whether the statements are misstated and/or misrepresented.Audited financial statements are important. Such statements act as definitive proof to capitalists that a specific entity has the capability to create revenues from its day to day activities. This, in turn, will let the company acquire external funding for purposes of furthering and improving their operations.
Financial statement auditors play a critical role in every financial statement audit. To ensure quality and reliable audits, here are the topmost characteristics that make a great external auditor.
Have Extensive Know-How or Expertise on Generally Accepted Accounting Standards (GAAS)
The GAAS is the code of conduct of every external auditor. These are not just a mere set of stringent and austere rules to be blindly observed and adhered to. Great financial statement auditors comprehend this and know how these standards can be applied to different circumstances and situations. Since they have tan extensive comprehension of GAAS, these auditors will ensure that the correct auditing is undertaken.
Eager for Knowledge
Great financial statement auditors always pursue issues in order to bolster and enrich their understanding of an entity’s culture, key players, and competitive setting. This allows them to fully grasp the company’s inner workings, comprehend the entity’s drivers for success, and makes them enthusiastic to become up-to-date on trends in the industry. Moreover, their inquisitiveness motivates them to meekly question and investigate the financial information repeatedly until it becomes understandable.
Know the Business Risks
Excellent financial statement auditors can identify what the audit risks are because of their knowledge and understanding of business risks. Their proficiency on these matters creates an efficient and effective audit plan, which means that the correct account balances and transaction cycles will be audited properly and rightfully.
Merriam-Webster described an auditor as “someone who hears or listens.” Great auditors ask trenchant and perceptive questions without being disrespectful or displeasing. They also let their clients communicate in an unstructured manner. This, in turn, promotes an unrestrained flow of information.
Have Communication or People Skills
Aside from having good analytical skills, great auditors effectively and efficiently convey and relate all their findings. They also have the skill to read people and are able to blend in or adjust to any situation.
An amazing financial statement auditor can keep his/her skepticism at all times. This is paramount since skepticism is a driver of inquisitiveness, which is also a good trait that an external auditor ought to possess. The standards describe skepticism as being independent and impartial. These auditors do not trust nor distrust, believe nor disbelieve.
Have a Good Grasp of the Instruments in Trading
Nowadays, almost all entities utilize the most recent and most advanced tools and instruments they can access. Quality financial statement auditors can conduct audit efficiently and effectively since they have a good grasp and know-how of these tools.
Principled, independent, have an eye for detail, tact, resilient and diligent are also among the traits of a great financial statement auditor.