What do external auditor do?

External auditors are independent professionals who are hired by a company to review its financial statements and provide an opinion on their accuracy and fairness. Some of the key tasks and responsibilities of external auditors include:

  1. Planning: External auditors start by planning the audit, which involves defining the audit objectives, identifying the audit scope, determining the audit procedures, and developing an audit timeline.
  2. Gathering Information: External auditors gather information about the company being audited, including financial statements, internal controls, and other relevant documents. They also interview employees, review contracts, and assess the company’s processes and procedures.
  3. Testing: External auditors perform tests on the company’s financial statements and internal controls to determine whether the information is accurate and reliable. These tests may include reviewing the company’s records, testing the accuracy of its financial reports, and observing its operations.
  4. Evaluating: External auditors evaluate the results of their tests to determine whether there are any material misstatements or irregularities in the company’s financial statements or internal controls.
  5. Reporting: External auditors provide a written report that summarizes the results of their audit and includes their opinion on the accuracy and fairness of the company’s financial statements. This report is called an audit report and is often required by law for publicly traded companies.
  6. Follow-Up: External auditors follow up on any issues or recommendations identified during the audit to ensure that the company takes appropriate action to address them.

Overall, the main objective of external auditors is to provide assurance to external stakeholders, such as investors, creditors, and regulators, that the company’s financial statements are accurate and reliable.

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