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What is an External Auditor?

External AuditorIf you have given any consideration to pursuing a career in the accounting sector, you may at some point have asked yourself “What is an External Auditor?” By reading the information below, you can obtain an answer to this question and then determine whether this vocational sector would be beneficial or fulfilling for you.

The External Auditor – A Brief Overview

Although defined diversely, the term “external auditor” is typically used to refer to an individual who performs audits in compliance with specific rules and regulations on the financial records of a government entity, company, or other type of institution. The external auditor is independent from the entity that is being audited. The individuals who make use of the entities’ financial data, such as the general public, government agencies, and investor, need the information provided by the external auditor in order to attain an unbiased report.

Roles and Responsibilities

Although the roles and responsibilities of the external auditor will differ based on the employer’s requirements, some of the typical tasks that individuals who hold this position will be required to complete include:

  • Planning and performing financial and operational audits to make sure that financial statements conform to GAAP requirements
  • Performing internal controls tests to ensure efficacy
  • Performing tests of account balances to analyze reasonableness
  • Preparing and subsequently presenting reports on audit findings to members of management (information presented can include severe control deficiencies and/or material misstatements as well as recommendations regarding how to improve upon or eliminate such shortcomings in the future)


Individuals who want to work as an external auditor should plan to earn a bachelor’s in a related field such as finance, business, or accounting. Those who earn a master’s degree will likely have more job opportunities. Typically, a public accounting firm will require that the external auditor possess a Certified Public Accountant (CPA) license issued by the state or meet its established educational qualifications before a job offer is extended. Additionally, many firms will encourage prospective employees to earn a Certified Fraud Examiner (CFE) credential. Several other valuable credentials one can attain in order to become a marketable job candidate include the Certified Internal Auditor (CIA), Certified Management Accountant (CMA), Certified Government Auditing Professional (CGAP), or Certified Information Systems Auditor (CISA).


Individuals who aspire to become external auditors should note that there are several subjects in which they will be expected to possess a substantive amount of knowledge. Some of them include:

  • Financial statement components
  • Journal entries
  • Accrual-accounting
  • Legal compliance rules and regulations
  • Computer systems
  • Accounting software
  • Double-entry accounting

Some of the abilities the external auditor will typically need to have include:

  • Written and verbal communication
  • Professional skepticism
  • Assertiveness
  • Objectivity
  • Independence
  • Analytical abilities
  • Problem-solving abilities
  • Orientation to details


According to Indeed, an external auditor can expect to earn about $75,000 annually. However, this salary is subject to change based on factors such as education, area of expertise, and location. For example, an external auditor in Alaska can earn about $57,000 annually while someone who holds the same position in Virginia will likely bring in $76,000 each year.

Related Resource: Internal Auditor


If you are interested in pursuing a career within the accounting sector, you should know that doing so can be financially rewarding and intellectually stimulating. Now that you know what an external auditor is, you can determine whether pursuing a career in this vocation would be beneficial for you.