ASSURANCE & EXTERNAL AUDIT

External audit is a vital aspect of doing business in Malaysia, ensuring that reported financial information is accurate, transparent, and reliable.

Overview

External audit is the periodic review of financial data and processes of an organisation by an external party, to ensure that income is reported correctly and that its money is being properly used.

Aside from just inspecting accounts, auditors can also act in advisory roles. They can assess internal financial controls to identify potential weaknesses, help organisations review and mitigate financial risk, as well as ensure that the organisation is complying with all relevant laws and regulations in terms of how it makes money and reports its earnings.

External auditors usually work for professional accounting firms or the public sector (e.g. the Accountant General’s Department). They ensure clients’ financial records are correct and in line with the law, and may also advise clients on accounting best practices. An annual external audit is a legal requirement for businesses in Malaysia, so external auditors’ services are always in demand.

This type of audit work is typically paired with assurance – that is, verifying the processes that an organisation uses to keep its financial records and ensuring that they are legally compliant and follow professional accounting standards. Assurance can be done as part of a broader external audit, or as a standalone process.

External audit work may also cover other investigative tasks, such as carrying out due diligence on a company that is a target for a merger or acquisition, or checking to ensure a company is meeting sustainability or social responsibility standards.

Career Pathways

Graduates usually start their accounting careers training in external audit while studying for a professional qualification. This is because this line of work provides lots of real-world exposure from the get-go.

Auditors-in-training typically work in teams, which means there are always senior colleagues there to help and advise you, or help balance the load if you need time off to study. You can expect to spend a lot of time out of the office or moving around the country, as external audit work is often done on-site at a client’s workplace.

Once you obtain a professional qualification, more options will open up to you. You can remain in external audit and work your way up to team lead and management roles, join the public sector, or switch tracks to internal audit work. You may also decide to leverage off the experience you gained doing external audit work to branch out into another area of accounting entirely.

External auditors typically work much longer hours than their internal audit counterparts, as they are constantly moving from one client’s audit to the next. This also takes into account the fact that you will likely have to balance working with studying for your professional qualification in the first few years of your career.

There can be tremendous pressure to meet audit deadlines, especially if multiple clients end their financial years around the same time. But this is balanced out by the variety of companies you get to visit, the opportunity to meet new people, and the chance to gain plenty of in-depth insights into the local marketplace.

Required Skills

Having strong analytical skills is essential for an auditor. You must be able to analyse financial data and the processes by which said data is captured, in order to identify patterns and trends that could indicate potential issues.

Good time management and stress management skills are key as well. You may be handling multiple clients’ audits at the same time, and knowing how to pipeline tasks while still keeping a cool head will be essential to getting your job done.

You must also have great attention to detail in order to spot discrepancies or errors. For instance, an auditor may review a company’s financial statements and notice that the reported inventory figures do not match the actual physical inventory records from a site visit.

Communication skills are also crucial, as you must be able to communicate complex financial information to clients or internal stakeholders in a clear and concise manner.

Lastly, because auditors often work in teams, teamwork and interpersonal skills will be key. You must also have the initiative to dig deeper or work on things independently whether by yourself of when the team is present.