Public Accountant

Prime responsibility of a public accounting firm is auditing financial statement. Audit is the accumulation and evaluation of evidence about financial information to determine whether the information prepared in accordance with the regulation and criteria set by the related body.

There are three type of audit:

Operational Audit. An evaluation of the efficiency and effectiveness of an organization’s operating procedures and methods. The reviews are not limited to accounting data, they can include the evaluation of organization structure, computer operations, production methods, marketing, and any other area in which the auditor is qualified. Example is evaluating the efficiency and effectiveness of a computerized point of sales system in a retail company. The evidences will be evaluated are (1) the total record processed per day, per month, and per cashier; (2) error report per day, per cashier and per month; (3) the availability of backup data; and so on. The evidence will be compared with the policy and standard set by the management.

Compliance Audit. The audit performed to determine whether the auditee is following specific procedures, rules, or regulations set by some higher authority. Example is a bank has to comply with many regulations set by Central Bank, like regulation about capital adequacy ratio. The auditor will use financial data to compute the capital adequacy ratio of the bank. Then the computed ratio will be compared with the rate set by Central Bank.

Financial Statement Audit. The audit performed to determine whether the financial statement prepared according to the generally accepted accounting principles. The evidence accumulated are the transaction documents, the records –softcopy or hardcopy–, and information from outside company.

Public accountant profession in every country takes responsibility to make sure that only competent auditor have the right to do audit. Thus, only licensed public accountant can give auditing service to the companies. They can get the licensed after they pass by an examination and fulfilled some requirement set by the profession body. As an example, in Amerika, only a person graduated from accounting major, with a minimum number of accounting credits, can follow the exam, uniform CPA (Certified Public Accountant) examination requirement. Beside that, the candidate also should have a working experience. As a note, these requirements can be vary between the state.

In the last decade, information technology development changes the auditing environment. Some company is very much dependent with technology, like bank, or airplane reservation system. Thus, some of the data and evidence is no longer paper based. Auditor has to understand database concept to extract and evaluate the financial data. Moreover, know-how about database security is also important, due to the GIGO (garbage in garbage out) nature of soft data. Thus, some new young auditors also pursue CISA (Certified Information System Auditor) certification to get assurance that they have competency in auditing in the information system environment.