A quick review of the Audit job…

A quick review of the Audit job…

Louis DETALLE

In this article, Louis DETALLE (ESSEC Business School, Grande Ecole Program – Master in Management, 2020-2023) explains what an Audit analyst works on, on a daily basis.

What does the Audit job consist in?

The financial auditor expresses an opinion on the financial statements of a company. Its objective is to carry out the work necessary to give an informed opinion on the true and fair nature of the published accounts.

The financial auditor is therefore the guarantor of the reliability of the company’s financial information and has a great responsibility, in particular to the company’s third party stakeholders who invest in the company on the basis of the information published by the company.

What are the biggest audit firms?

Deloitte, Ernst and Young (EY), PricewaterhouseCoopers (PwC) and KPMG are the four audit and consulting firms that make up the Big Four. They represent the most influential consulting firms in the world. They are the most influential consultancies in the world, employing nearly 1,200,000 people worldwide.

However, some other players are very influential, such as Mazars in France, which is ranked neck and neck with the Anglo-Saxon Big Four. On the other hand, smaller companies do not necessarily need to call on such large firms as their audits are not as labour intensive.

What does an Auditor work on?

In the case of an accounting and financial audit, it is an examination of the company’s financial statements in order to assess the company’s accounts and verify their fairness, compliance and regularity. As the auditor is expected to give an opinion on the fairness of the accounts, the auditor and his team will study the different accounting cycles of the company: income and customers, costs and suppliers, but also equity, cash flow, stocks and fixed assets, etc.

The objective of this review of the major financial masses is to understand the client’s challenges related to its business, its environment, its organisation, and to understand its internal processes in order to see how all this is reflected in the accounts. A meticulous verification of the accounts and invoice amounts is carried out (often subcontracted).

The common objective of all engagements is to provide confidence to both external investors and the client, who may need to make adjustments after the annual audit. The client may have to make adjustments after the annual audit because their internal control systems are more or less effective, and they may present inaccurate accounts unintentionally but more inadvertently.

Other audits may therefore cover the environment, the production system, ethics, safety and many others. The role of a quality audit, for example, is to check whether the client company’s stated quality objectives are being met. The auditors must ensure that the quality management systems comply with the applicable contractual and regulatory requirements.

The use of AI in order to quicken the audit job.

Artificial intelligence (AI) can potentially impact the audit profession in a number of ways. Here are a few examples:

Auditing large amounts of data: AI technologies, such as machine learning algorithms, can help auditors analyze and interpret large amounts of data more efficiently and accurately. For example, an AI system could be used to identify patterns and anomalies in financial data that might indicate fraudulent activity or other problems.

Improving efficiency: AI can automate certain tasks, such as data entry and analysis, allowing auditors to focus on higher-value activities, such as interpreting results and communicating findings. This can help improve the efficiency and effectiveness of the audit process.

Enhancing risk assessment: AI can help auditors better understand and assess the risks associated with a particular business or industry. For example, an AI system could analyze data on economic conditions, market trends, and other factors to help identify potential risks and provide recommendations for how to mitigate them.

Providing real-time monitoring: AI can be used to monitor a company’s financial data in real-time, alerting auditors to any unusual activity or trends that may warrant further investigation. This can help auditors identify potential issues earlier in the process, which can lead to more timely and effective interventions.

Overall, the use of AI in the audit profession has the potential to improve the accuracy and efficiency of the audit process, while also helping auditors to identify and address risks more effectively.

Related posts on the SimTrade blog

   ▶ Pierre-Alain THIAM My experience as a junior audit consultant at KPMG

   ▶ Louis DETALLE Wirecard: At the heart of the biggest German financial scandal of the 21st century

Resources

Youtube The Audit Methodology

KPMG Careers website

EY Careers website

About the author

The article was written in December 2022 by Louis DETALLE (ESSEC Business School, Grande Ecole Program – Master in Management, 2020-2023).

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