External audits play a key role in building trust, ensuring transparency, and supporting strong financial governance. This overview breaks down what an external audit involves, why it matters, and how it benefits both organisations and professionals across the industry.
What is an external audit?
An external audit is an independent review of an entity’s financial statements, conducted to provide assurance that they are accurate, complete, and comply with accounting standards and regulations. It’s typically carried out by independent registered auditors who are not part of the organisation. For graduates entering the profession, it’s a valuable process to understand because external audits help build trust with shareholders, regulators, and the broader public.
How is it different from an internal audit?
The main difference lies in purpose and perspective. External audits focus on financial accuracy and are primarily for external stakeholders. Internal audits are usually carried out by an internal team and focus more on assessing risk, improving internal processes, and advising management. Both are essential but external audits provide that crucial independent opinion that adds credibility to an organisation’s reporting.
Why do entities need an external audit?
External audits provide independent assurance that an entity’s financial statements are accurate and compliant with relevant laws and Accounting Standards. These builds trust with stakeholders like investors, creditors, regulators, and the public who rely on that information to make informed decisions. In many cases, audits are a legal requirement, especially for larger entities. But even when not mandatory, many organisations choose to have audits to strengthen their internal systems, improve credibility, and attract funding or partnerships.
What does the External audit process look like?
The audit process typically follows five key stages:
- Planning – understanding the client’s business and identifying key risks.
- Fieldwork – gathering evidence through testing transactions, systems, and controls.
- Review – analysing findings and resolving any issues or inconsistencies.
- Finalisation – preparing the audit report and Audit findings report.
- Reporting – presenting findings to management or those charged with governance.
Throughout the process, auditors communicate with the client regularly and document everything carefully to ensure transparency and compliance.
Career benefits of working in External audit
A role in external audit can be a fantastic launchpad for your career. You gain exposure to a wide variety of clients and industries, which helps build both technical knowledge and commercial awareness. You also develop valuable transferable skills like time management, teamwork, critical thinking, and communication that are highly regarded in any business environment. Many professionals who start in audit go on to thrive in finance, consulting, strategy, or senior roles in industry.
What makes external audit enjoyable?
One of the best parts of external audit is the variety. You get to work across different industries, engage with diverse clients, and constantly build your technical and soft skills. It’s fast-paced and team-oriented, and you’re always learning. For many graduates, it’s a great launchpad into the world of finance and business, offering a unique lens into how businesses really operate.
Ready to explore a career in external audit?
Whether you’re a graduate looking for a dynamic start or a professional seeking to broaden your expertise, external audit offers opportunities to build trusted relationships, sharpen your skills, and make a real impact on business transparency and governance. If you’re curious to learn more—or want to take the first step into this rewarding field—reach out to our People and Culture team today recuritment@accrumelb.com.au.
