By Monica Hubler, DBA
Full-Time Faculty, Kaplan University
The accounting profession is one that is responsible for the accuracy in presenting financial statements and to ensure that the statements are free of any misrepresentation. To ensure accuracy is present, each year these numbers are reviewed and analyzed by an external auditor.
An auditor is also required to assess the internal controls of the organization and management and how they are implemented to protect the assets of the business. These auditors are usually hired from an outside accounting firm, familiar with the industry, and licensed professionals. The fraud examiner, on the other hand, is one who is called to detect fraud. Both an auditor and fraud examiner shares some common attributes, but their roles are different and it is important to know and understand those differences.
An external auditor is contracted to provide an independent and objective assessment of the company’s operations and has a major focus on their internal controls. The auditor helps to review and analyze how effective the company assesses risk management. In addition, the auditor is looking to ensure that the financial information under review is accurate and without material errors.
An auditor will also evaluate the antifraud and internal controls over financial reporting and will issue an opinion on management’s assessment of internal controls. However, auditors will not look for fraud—their focus in the internal controls and financial statement—but if there is a discrepancy upon review of any transactions or samples, they should notify management. Additionally, they should notify management of any red flags that may become evident.
While fraud examiners can have an accounting degree (or several), they have a specific knowledge and resource for fraud detection. Fraud examiners are usually invited to a company when there
As we analyze the differences between an auditor and a fraud examiner, we see that an
Links for Additional Information
- ACFE: http://www.acfe.com/career-path-internal-auditor.aspx
- Whose Responsibility is it to Deter and Detect Fraud: http://www.jgbm.org/page/5%20Marge%20Allen.pdf
- How Does a Fraud Exam Compare With an External Audit?:http://www.mlrpc.com/articles/how-do-fraud-exams-and-external-audits-differ/
Interested in this career? Check out Kaplan University's business resources here.
Monica Hubler, DBA, is a full-time faculty member at Kaplan University. The views expressed in this article are solely those of the author and do not represent the view of Kaplan University.