What is external audit and what does an audit partner do?
An external audit is an independent examination of the financial records prepared by an organisation to verify that the accounting records for a company provide a true and accurate picture of the organisation’s finances. The audit report is produced at the end of the audit process and is typically published with the company's annual report. The audit report is independent and external and takes the form of a written letter from the auditor containing the opinion of whether a company's financial statements comply with generally accepted accounting principles. It is relied upon by users of the accounts such as banks, creditors and investors.
External audit partners oversee and direct the activities of audit teams and have ultimate responsibility for signing off the audit report. They are responsible for ensuring that the audit is completed with appropriate rigour, on time and for signing off on the work completed. They also act as the key relationship contact with the client and ensuring that the client receives a high-quality service. Partners typically have revenue targets and a primary focus is on managing their existing client portfolio as well as developing new client relationships. Depending on the organisation, External Audit Partners also may be in charge of hiring new employees and selecting audit teams for client engagements.
Main responsibilities include, but are not limited to:
- effectively manage a portfolio of clients
- developing new client relationships to ensure business growth
- planning and managing audit procedures, ensuring they are completed by the set deadline
- maintaining up-to-date knowledge about company standards, policies and regulations
- providing support to ensure timely completion of audit projects, including monitoring turnaround and reviewing audit files
- managing expenses and staffing to increase revenue
- addressing client concerns
- monitoring budget and WIP on assignments
- overseeing and signing off audits.
Why are they important?
External audit partners have ultimate responsibility for signing off the audit reports produced at the conclusion of the statutory audit process on behalf of the partnership. They are also responsible for managing and retaining existing clients as well as engaging new clients.
Skills needed for this role
It is essential that external audit partners have excellent communication and interpersonal skills in order to successfully manage client relationships. A partner must also have appropriate technical skills, a solid leadership pedigree with good people management and have a strong sense of integrity.
Strategic Professional Options examinations linked to this role
Career opportunities presented by this role
The role of partner is the highest position that can be reached in the field of audit.
High level competencies required by audit partners include:
Audit and assurance
A. Advises on and communicates effectively the role and scope of audit and assurance engagements to relevant stakeholders.
B. Applies regulatory, legal, professional and ethical standards relating to audit and assurance engagements.
C. Plans and prepares for audit and assurance engagements.
D. Performs effective audit, and assurance engagements.
E. Reviews and reports on the findings of audit and assurance engagements.
F. Guiding efficient and effective operations.
Corporate and business reporting
A. Prepares financial statements, corporate financial and integrated reports for external stakeholders using appropriate technology.
B. Leads effective decision making through analysing, evaluating and communicating performance and position of entities.
C. Prepares financial statements for groups of entities using appropriate technologies.
D. Monitors, critically evaluates, and advises on the relevant accounting standards, regulations, conceptual and financial reporting frameworks.
Data, digital and technology
A. Identifies strategic options to add value, using data and technology.
B. Analyses and evaluates data using appropriate technologies and tools.
C. Applies technologies to visualise data clearly and effectively.
D. Applies scepticism and ethical judgement to the use of data and data technology.
A. Links developments in global trade, markets, business practices and the economic environment to required improvements in the financial and risk management of an organisation.
B. Advises on business asset valuations, capital projects and investments using appropriate analytical qualitative and quantitative techniques.
C. Identifies, evaluates and advises on alternative sources of business finance and different ways of raising finance.
D. Communicates and advises on the impact on financial decision making on current developments in regulation, governance and ethics.
E. Assesses and advises on appropriate strategies to manage business and organisational performance regarding business and finance risk and effectively communicates the impact.
Governance, risk and control
A. Evaluates organisational structures and governance to protect the long-term interests of stakeholders.
B. Recommends appropriate strategies to ensure adherence to governance structures and application of best practice internal controls.
C. Identifies and manages risk appropriately.
D. Uses risk management for the best interests of an organisation and its stakeholders.
E. Monitors and applies relevant legislation, policies and procedures.
Leadership and management
A. Applies appropriate leadership strategies to effectively deliver business objectives.
B. Leads, motivates and manages people to optimise performance and effectiveness.
C. Collaborates, supports and works to achieve the objectives of the organisation, applying appropriate digital technologies.
D. Acts proactively and thinks strategically, in anticipating organisational needs, recognising the wider business environment and dynamics.
Stakeholder relationship management
A. Positively develops relationships with internal and external stakeholders.
B. Communicates and gains commitment from internal and external stakeholder.
C. Uses emerging technologies to collaborate and communicate effectively with stakeholders.
D. Applies professional and ethical judgement when engaging with stakeholders.
E. Aligns organisational strategic objectives with stakeholder needs and manages expectations.
Strategy and innovation
A. Applies business acumen and commercial awareness to deliver business objectives.
B. Recommends a range of suitable strategic options from which to develop sustainable plans and objectives.
C. Evaluates, justifies and implements suitable strategic options.
D. Adopts and applies innovative methods to implement strategy and manages change.
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