Auditing — it’s a term lots of people have heard, but not everyone knows what goes on behind the scenes. Whether external or internal, auditors play a big role in making sure businesses are running properly and that the numbers people see can be trusted. Let’s take a look at what auditing really is (and isn’t), how it works, and why it matters.
External vs Internal Audits?
An external audit is when an independent auditor (outside the entity) examines financial statements and related information to see if they’re accurate, comply with Accounting Standards, and give a true picture of the entity’s financial performance and position. This helps shareholders, lenders, and the public trust what the entity reports.
An internal audit, on the other hand, takes place within the organisation itself, often by an in-house team or contracted professionals. Their focus is more on risk management, controls, processes, and helping management do things better. They check that systems are effective, that operations run as they should, and that potential problems are identified before they become big issues.
Common Misconceptions
Many people think auditors are simply there to “check receipts” or catch someone doing the wrong thing, but that’s far from the reality. Auditors don’t provide absolute guarantees that no mistakes or fraud exist — instead, we offer reasonable assurance, which means a high level of confidence that financial information is accurate and reliable. Just as importantly, our role goes beyond identifying errors. We work closely with businesses to strengthen processes, improve internal controls, and reduce risk, ultimately supporting organisations to operate with greater transparency and confidence.
How the Audit Process Works
Here’s a typical journey for an external audit (internal audits follow similar logical steps, though the emphasis and purpose differ):
- Planning & Understanding – Learn about the business: how it operates, key risks, internal control systems, and industry environment. Identify where things might go wrong.
- Risk Assessment – Determine what audits and checks need extra attention — maybe large transactions, revenue, inventory, liabilities, etc.
- Fieldwork / Testing – Collect evidence: sample transactions, inspect documents, observe processes, confirm account balances with external parties, etc.
- Analysis & Review – Evaluate the results, check for anomalies, follow up on issues. Vet findings with more senior audit team members.
- Reporting & Recommendations – Issue an audit opinion (in external audits) about whether the financials are materially correct. Also provide suggestions to management or the board about how to improve things — controls, efficiency, risk mitigation.
Why Auditing Matters
Auditing matters because it builds trust. Investors, lenders, regulators, customers, and employees all rely on accurate financial information to make decisions. A thorough audit helps ensure that information is reliable. It also highlights weaknesses in systems or processes so that issues can be addressed before they turn into bigger problems. Beyond that, audits promote transparency and good governance, helping organisations operate ethically. In many cases, audited financials are also a practical necessity — they can be essential for securing financing, attracting business partners, or winning contracts.
Auditors are there to provide assurance and insight, not just to “find faults.” Through external and internal audits, businesses can operate with greater confidence, stakeholders can trust what they see, and everyone is better off.
Auditing as a Career
For anyone considering a career in audit, there are plenty of reasons to take the plunge. It offers a chance to look behind the scenes of different types of businesses and industries, giving exposure to far more than just numbers on a page. The work develops valuable skills in analysis, communication, and problem-solving, and no two days are the same. One day you might be reviewing financial statements, while the next you’re advising management on how to improve systems and processes.
Audit is also a fantastic launchpad. Many professionals go on to build careers in broader finance, consulting, governance, or senior leadership roles, using the skills and insights they gained through auditing as a strong foundation.
