An external auditor is an accountant who independently audits the books and financial records of a company. This person is not a direct employee of the company and therefore is required to give an unbiased review of the company's finances. The results of the audit are often relayed to the investors and shareholders, government officials or the general public depending on the nature of the audit. The main difference between internal and external auditors is that with the external audit, the auditor does not do any appraisal of the management strategies nor do they express an opinion on the financial statements.
The only opinion an external auditor can give regarding a company’s finances is whether or not there is any evidence of mismanagement in the financial reporting. For public companies operating in the United States, the SOX (Surbanes-Oakley Act) has strict regulations on how you can operate in this position and how you can evaluate the internal controls of a business and its financial reporting. In the United States, only certified public accountants can work as external auditors.
A public accountant works with a firm of accountants or as an independent accountant. In order to obtain this position, you must hold a Bachelor’s or Master’s degree in accounting. The certification process for the CPA certificate varies according to the state in which you work, so it is important to check the regulations for the state. For example, most states require that you have an extra year of study beyond the undergraduate degree to be eligible for the exam. However, Delaware does not have this stipulation so graduates from university can write the exam. If you already hold the designation as a chartered accountant, you don’t have to meet this requirement for extra courses either.
The exam for the CPA in order to become an external auditor is computer based. It tests your research skills as well as your knowledge of accounting and auditing. It is helpful if you have practical skills in performing auditing tasks if you have some experience. As an accountant with a large firm, you may be able to work with an auditor and gain experience and tips that will help you pass the exam.
When you write the CPA exam in order to become a certified public accountant and an external auditor, you do not have to write all parts of the exam at one sitting. You take each part of the exam and then study for the next part. In a three-month period you can write one or two sections of the exam, but if you fail a part you cannot write it again for three months. It is very likely that you will fail at least one part of the exam because very few accountants pass all parts the first time they take it. When you pass a section of the exam, the credits you earn are valid for eighteen months. However if you take longer than that period to complete the exam, any credits you have will be lost.
