18 Top Skills of an Auditor (Plus Examples of How to Use Them)

By Indeed Editorial Team

Published 8 November 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Auditors are essential members of many organisations' financial teams. They use their skills to produce meaningful work for their employers relating to financial reports and fraud detection. Learning about the skills of an auditor may help you decide if such a position is the right fit for you. In this article, we discuss what an auditor does, describe their responsibilities and list 18 skills that they commonly have.

18 skills of an auditor

Discovering the top skills of an auditor can help you choose which ones to develop for your career. Here are several skills that auditors commonly have, with a description of each skill:

1. Financial analysis

Auditors apply techniques to analyse company transactions. These techniques include analysing reported income versus cash receipts, analysing the quality of the accounting records and evaluating bank statements. For example, if the company issues receipts for which bankers give signatures with no supporting documents, auditors look at these receipts and ask for additional evidence. Auditors regularly observe these financial statements.

2. Business analysis and problem-solving

Auditors analyse the company's business operations, checking for problems in the business operations by using many of their skills. For example, auditors regularly check to see whether management is carrying out its responsibilities properly by monitoring the activities of executives regularly.

Related: What Is an Internal Audit and What Are Its Primary Objectives?

3. Systems development

Auditors use systems development techniques to analyse financial information. They use applications like word processors, spreadsheets and databases to compile their information. For example, auditors use their skills to compare the income on financial statements with other reports that document cash flow to evaluate the financial health of a business.

4. Communication

Auditors work closely with other departments within a company, including accounting, finance and purchasing departments. They might consult with external parties such as accountants, attorneys and banks, too. For example, auditors liaise with accountants to obtain additional information. The auditor also communicates with the company's directors or officers for questionnaires or to obtain further information.

Related: Career Prospects for Financial Planning and Analysis

5. Risk management

Auditors are responsible for developing risk management controls within an organisation. Auditors focus on areas relating to risk management, risk analysis and risk mitigation, help businesses navigate financial issues so that they can adhere to government regulations. For example, auditors use their skills to scrutinise financial statements to verify that they identify and assess all risks before disclosure.

6. Financial reporting

Auditors are responsible for reviewing financial reports that are released to the public. The auditor does this by auditing financial statements, earnings releases and SEC filings. For example, if the company doesn't assess the significant risks in its quarterly earnings reports, auditors bring these areas to the company's attention so that they can account for them.

7. Internal control

Internal control helps ensure people are using assets and resources responsibly and efficiently. Auditors perform procedures, such as observation, documentation review, analysis and interpretation of data, to test internal controls. For example, they regularly check internal controls for every major account balance every month by comparing their balances with company records, which are usually reviewed by one or more finance professionals at least once a month.

Related: Careers in Finance (With Types, Requirements and Job Roles)

8. Fraud detection

An auditor may use special procedures to detect fraud in an organisation. This involves studying internal controls and investigating unusual transactions. For example, auditors review bank statements to identify and resolve any unusual transactions.

9. Planning and organisation

Auditors use planning and organisation skills to organise their work. For example, auditors prepare checklists and guidelines to ensure compliance with standard audit documentation, such as general ledger reviews, sales journals and bank reconciliations.

10. Information technology

Auditors regularly use information technology skills to complete their tasks efficiently. They may set up systems to capture transaction data digitally and use specialised software to perform analyses. Auditors are also familiar with the company's IT systems. This way, they can test the integrity of data within these systems.

11. Financial planning

Auditors often work with management to create budgets for net income, cash flow and other types of reports related to performance goals. For example, auditors may recommend that management hire more personnel if they notice that their current team can't keep up with the number of transactions being processed.

12. Performance reporting

Employers may require auditors to report their findings to management regularly, usually at least once per month. For example, auditors may provide management with proactive insights about potential risks. This helps the organisation remain aware of its financial progress so that it can make relevant adjustments to its long- and short-term goals.

13. Critical thinking

Auditors regularly use critical thinking skills in all their work. Auditors question the accuracy of information if they see discrepancies between their findings and the management's assertions. For example, auditors may ask questions about the validity of transactions if they notice that a company is paying too much for supplies or that employees are being paid too much.

14. Verification

Auditors often can verify information by using their own knowledge and assumptions to conduct a thorough investigation into a company's financial statements. They also check whether the management team has made adjustments to correct errors in financial records. For example, auditors are responsible for reviewing management's financial records to determine whether the company has made the required adjustments to ensure that its financial records are correct.

15. Decision making

Auditors also make decisions on issues related to the company's financial performance. For example, auditors can make recommendations related to unfavourable reports on cash flow or liabilities, liquidity or compliance with accounting standards. They may also make decisions regarding the best actions to take or tasks to complete to maximise their productivity.

16. Mathematics

Auditors use a range of statistics in their work. For example, they may calculate risks, return on investment and the value of assets, liabilities and investments. They also use mathematical formulas when they write reports to help the management team with their analysis.

17. Computer use

Auditors often use computers in their work. In addition to using spreadsheets to prepare financial documents, they also use file management software and database programs. Auditors regularly use spreadsheets and similar programs to analyse and evaluate the financial performance of the company and make appropriate recommendations for improvement.

18. Leadership

Auditors take on various leadership roles and responsibilities as part of their work. For example, they may provide advice to management on financial matters, work with professionals outside the audit department, serve as a member of the company's board of directors and develop new systems and procedures. They may also lead a team of auditors depending on their position within an organisation.

Read more: What Does an Auditor Do? (With Career Steps and Skills)

What is an auditor?

An auditor is someone who uses analytical skills to examine financial accounts to verify that they're accurate. These procedures may include collecting historical data, reviewing supporting documentation, assessing risk areas, performing sampling techniques and other methods for detecting fraud and material error while also considering any changes in management or business operations since the previous filings.

The objective of an audit is typically to produce a report that contains detailed information about all significant transactions within a specified period, providing advice on complex topics and verifying compliance with applicable laws and regulations.

Related: How to Become an Internal Auditor

What does an auditor do?

Here's a list of common job duties that auditors have:

  • Observing financial transactions and maintaining records

  • Gathering of data from sources of information

  • Reviewing the company's financial statements, internal controls and compliance with laws and regulations

  • Testifying about audit reports in court or before a legislative body

  • Recommending to management how to improve the quality of their financial statements by eliminating fraud, errors and material misstatements

  • Using standard principles and professional judgment to make decisions

  • Using methods and procedures to test the accuracy, completeness and consistency of the financial statements

  • Producing a report that contains detailed information about all significant transactions within a specified time frame

  • Examining whether internal controls are adequate to ensure compliance with applicable laws and regulations

  • Investigating risks associated with financial statements, such as those arising from fraud or negligence

  • Evaluating any significant changes in net worth or income since the preparation of previous financial statements

  • Comparing their work to that of other auditors performing similar tasks

Explore more articles