Demystifying Auditing: The 10 Most Common Myths and Realities About Auditors
There are many myths about auditors that often distort the perception of their role and the functions they perform through their activity. We will try to dismantle some of the most recurrent ones:
1. They are police officers or fraud detectors
Although auditors can detect fraud, their primary role is to review and evaluate financial statements and internal controls to ensure their accuracy and compliance with current regulations. They are not specialized fraud detectives.
2. They are enemies of employees
Auditors aren't there to point out personal failings or punish employees. Their goal is to improve processes and ensure the company's financial and operational integrity.
3. They only focus on numbers and financial data
Although numbers are a large part of their job, auditors also review processes, internal controls, and operational efficiency. Their work is comprehensive and encompasses various areas of the company.
4. Your work is simple and routine
Auditing can be very complex and requires in-depth knowledge of accounting standards, current legislation, and the specific industry in which the company operates. Furthermore, auditors must stay up-to-date with changes in accounting regulations and practices.
5. They always find mistakes
Not necessarily. They largely rely on statistical sampling, and their scope doesn't extend to the 100% of operations. The absence of significant errors is indicative of sound internal control and proper management. Auditors also emphasize good practices and the soundness of financial and operational systems.
6. Internal and external auditors are the same
Although both perform review and evaluation functions, internal auditors are employees of the company and focus on improving internal processes and operational efficiency. External auditors, on the other hand, are hired by the company to provide an independent opinion on the financial statements.
7. They do not add value to the company
Auditors contribute significantly to a company's success by identifying risks, recommending improvements to internal controls, and ensuring the accuracy of financial information, which can influence strategic decision-making.
8. They only work during the audit season
While there are peak periods, especially for external auditors, many auditors, especially internal ones, work year-round reviewing different aspects and areas of the company.
9. Auditors are inflexible and rigid
Although they must follow strict rules and procedures, auditors also seek to understand the context and specificities of each company. Their goal is to be fair and provide constructive recommendations.
10. Auditors are only needed in large companies
All businesses, regardless of size, can benefit from audits. Small and medium-sized businesses also need to ensure their financial records are accurate and their internal controls are effective.
Demystifying the work of auditors helps us to better understand the important role they play for their clients and the extraordinary social function they perform by guaranteeing the reliability of the financial information that users value in their decision-making processes.
