In audit accounting, there are essential skills such as scrutiny, communication, problem solving, time management, and status quo challenges. The audit accounting role need an eye to spot anomalies in reams of accounts for scrutiny. Constant communication is required to articulate on paper (to write reports) and in person (to presentthe important findings). The role needs to eliminate problems by actually solving them or improving the current situation. Deadlines must be managed by good ability in time management. Facing status quo in large organizations often turns into difficult situation, great courage is needed when speaking up.
Before the above mentioned skills are applied for compliance auditing, your organization would have used tools/software such as Xero accounting to work out the financial accounting side of things. Besides audit accounting, it is often required to do compliance auditing for processes or products. Compliance audits can be categorized in three main types including first, second, and third party audits. The type of audit to use would depend on many factors including scope, customers, suppliers, projects, contracts, certificates, licenses, or more.
First-party audit: It is an internal audit that is conducted by auditors who are directly employed by the company. The auditing employee should have no vested interest in the results of the audits. It is performed within a company to evaluate the weaknesses and strengths of the internal procedures. The evaluation is done by benchmarking against the standards in other companies in the same industry.
Second party-audit: This is an external audit that is performed by a customer against a supplier/vendor who the customer is going to use or is using. Usually, formal contracts or agreements are signed between the customer and the supplier who are delivering the products/services. Usually second-party audits are more formal than first-party-audits.
Third party-audit: Being independent is the key of the audits. This auditing is done by an agency which is not involved in the supplier and customer relationship of the operations of the organization. The agency must have no conflict of interest at all. This type of third-party audits may result in issuing certification, recognition, or registration, citations, license approval, etc.
Besides the first, second, and third party audits, there are specific compliance audits for processes/procedures and products.
Process or procedure audit: The audit verifies that processes/procedures are actually working within agreed/established standards. In short, the process audit evaluates the operations against pre-some determined instructions and measuresthe conformance to the standards. It also evaluateshow effective the standards are. A process audit would check against the conformance of some parameters including time, accuracy, responsiveness, temperature, pressure, composition, etc. It would examine the resources including equipment, materials, and/or employeesthat are responsible or involved in the application to transform the inputs into results. The performance of the entire process would be measured.
Product audit: It is the examination of a particular product (or sometimes a service). The subject of the audit may be a processed material, software, or hardware.