Auditor

Auditor

In accounting, an auditor is a certified public accountant (CPA) who performs an objective examination of a company’s financial statements and internal controls. They evaluate the validity and reliability of the data and confirms whether the financial statements were prepared in accordance with the rules of GAAP. Furthermore, there are two types: an internal auditor and an external auditor. They summarize the results of the audit in an audit report, also called an accountant’s opinion.

Internal Auditor, External Auditor

There are two types of auditors: internal and external. An internal auditor is an employee of the audited company. Whereas, an external auditor is not an employee of the audited company.

Audit Report

An auditor summarizes the results of the audit in an audit report. Then, the audit report states the their opinion of the validity and reliability of the audited company’s financial statements and other relevant data. Include the audit report in the audited company’s annual report.

An accountant’s opinion may be qualified or unqualified. If the opinion is unqualified, then the auditor concluded that the data are valid and reliable and the financial statements were prepared in accordance with the rules of GAAP. If the opinion is qualified, then the auditor concluded that the data may not be valid or reliable and the financial statements may not have been prepared in accordance with the rules of GAAP. Furthermore, a qualified opinion often warrants further investigation of the audited company’s financial statements and accounting systems.

Audit Definition

In accounting, an audit refers to the objective evaluation of a company’s financial statements and internal controls. It checks the validity and reliability of the data. Then it confirms whether the company prepared its financial statements in accordance with GAAP.

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auditor, external auditor, internal auditor

See Also:
Audit Committee
How to Control Annual Audit Fees
Managed Sales and Use Tax Audit Programs
Future of the Accounting Workforce

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