Auditing is a systematic process of obtaining and examining the transparency and truth of financial records of a business entity or the government.
The three types of auditors are internal, governmental, and external. Internal auditors are employees of the company whose financial statements are being examined. The purpose of internal auditing is to check the company's policies, procedures, and records, and evaluate the company's plans and attainment of goals. External auditors, on the other hand, are not employees of the company being audited. They evaluate the honesty of a company's financial statements and issue a written report that contains an opinion that they have formed regarding the company's financial statements. Government auditors largely work under the auspices of the Auditor General and are responsible for adding value to public sector entities. These auditors help public sector entities to accomplish their objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, governance processes and compliance to the Laws and Regulations of the land.
Auditing is done in a systematic manner following four steps: planning, gathering evidence, evaluating the evidence, and issuing a report. Auditors are required to go through detailed education and training that prepare them for the pressure and stress of handling complicated auditing tasks. The work they perform provides useful information to potential stakeholders, managers, and even external players such as lenders because auditing allows the internal and external clients to accurately assess a company's financial stability, thus, making way for investments to push through and aiding in the management's decision-making.