Becoming an auditor is a process that spans quite a few years of your life. First comes the awesome educational requirement. Then you have to pass the Uniform CPA Examination. Depending on the state in which you take the CPA exam, you may have to fulfill an experience requirement before you can apply for your CPA license. After you have that license, you need to find a job!
Getting the education to be an auditor
Most people interested in accounting or auditing major in business. To earn a business degree, you’re required to take a certain number of classes in a variety of disciplines, such as economics and finance. But if you’re thinking about doing accounting or auditing work for businesses that don’t directly employ you, you have to be very careful about the classes you take. You can’t sit for the Uniform CPA Exam until you’ve completed all the required course work. In most states (40 as of this writing), students must take an extra year of accounting- and auditing-related classes, such as Advanced Financial Accounting and Advanced Auditing in addition to the standard four years of course work required for a bachelor’s degree.
Many CPA candidates piggyback the extra classes into a Masters in Business Administration (MBA) because they’re usually halfway to that degree after finishing up the additional coursework.
Make sure you understand exactly what classes you need to take in order to sit for the CPA exam in your state. Your college adviser should be able to help you.
Taking the CPA exam
After you satisfy all the educational requirements, you’re ready to take the CPA exam. The American Institute of Certified Public Accountants (AICPA) writes and scores the exam. The test includes a mix of multiple choice and simulation questions, which are case studies that you research and provide a write-up for based on the question’s criteria.
The four-part Uniform CPA Exam covers these areas:
Auditing and Attestation (AUD): Auditing covers the principle tasks associated with the job; attestation is an engagement where you issue a report on a subject such as break-even analysis.
Business Environment and Concepts (BEC): This part of the exam covers general business transactions. For example, you must know the differences between a sole proprietorship and a corporation, or what constitutes a fiscal year (ending on the last day of any month) versus a calendar year-end (ending on the last day of December).
Financial Accounting and Reporting (FAR): This part of the exam is all about generally accepted accounting principles (GAAP) for businesses, governmental entities, and nonprofit organizations.
Regulation (REG): Federal taxation, business law and ethics, and your professional and legal responsibilities all come into play in this part of the exam. For example, you have the responsibility to possess both the education and experience required for each audit prior to working on the audit.