Financial Analyst vs. Auditor: What Are the Differences?

A career in finance can be both lucrative and interesting. Two common positions in this field are financial analyst and auditor. Both roles require strong analytical and math skills, but there are several key differences between the two. In this article, we discuss the similarities and differences between financial analysts and auditors, and we provide helpful tips for pursuing a career in finance.

What is a Financial Analyst?

Financial Analysts typically work in the financial industry to help organizations make sound investment decisions. They use their skills in math and financial analysis to assess the performance of stocks, bonds, and other investments. Financial Analysts also develop financial models to forecast the future performance of investments. They may make recommendations to buy, sell, or hold certain investments. Financial Analysts typically have a bachelor’s degree in finance or a related field. They also must be able to effectively communicate their findings to clients and other stakeholders.

What is an Auditor?

Auditors are responsible for examining an organization’s financial records to ensure they are accurate and compliant with regulations. They may also provide recommendations on how the organization can improve its financial management. Auditors typically work for accounting firms, but they may also be employed by government agencies or companies in a variety of industries. Auditors typically have a bachelor’s degree in accounting or a related field. Some Auditors may become certified public accountants (CPAs) after completing additional education and passing an exam.

Financial Analyst vs. Auditor

Here are the main differences between a financial analyst and an auditor.

Job Duties

One of the biggest differences between financial analysts and auditors is the type of duties they perform. Auditors examine a company’s internal processes to ensure that its financial records are accurate, while financial analysts provide external advice about how companies can improve their financial performance.

Auditors focus on evaluating a company’s accounting practices. They look at a company’s books and test its systems to make sure that its financial records are accurate. Financial analysts rarely work with a company’s internal records. Instead, they use the information auditors provide them with to create reports about a company’s finances.

In addition, financial analysts often work with non-financial professionals, such as managers in other departments or executives who make decisions about where to invest money. Auditors typically work only with other auditors and individuals from the accounting department.

Job Requirements

Both financial analysts and auditors need at least a bachelor’s degree in accounting, finance or another related field. Many employers prefer candidates who have a master’s degree as well. Financial analysts may also pursue the Chartered Financial Analyst (CFA) designation, which requires passing three exams within four years. Auditors can become certified through the Institute of Internal Auditors (IIA), which offers the Certified Internal Auditor (CIA) credential. To earn this credential, candidates must pass an exam and meet experience requirements.

Work Environment

Financial analysts typically work in an office setting, but they may also travel to meet with clients and attend conferences. They spend most of their time sitting at a desk or table and using computers to complete reports and analyze data. Auditors usually work full-time for companies that hire them as employees. They often travel to different locations to perform audits and visit facilities where the company’s products are produced.

Auditors may work irregular hours depending on the needs of the client. For example, auditing a manufacturing plant may require working during regular business hours when production is occurring. However, auditing a financial institution may only require working during normal banking hours.

Skills

Both financial analysts and auditors need to have excellent analytical skills. Financial analysts use their analytical skills to examine past trends and predict future activity in the markets, as well as to assess the financial health of companies. Auditors need to be able to analyze data to identify errors or irregularities.

Both financial analysts and auditors also need to have strong research skills. Financial analysts use their research skills to gather information about economic conditions, industry trends and specific companies. They then use this information to make recommendations to their clients. Auditors use their research skills to understand the policies and procedures of the organizations they are auditing. They also use their research skills to gather supporting documentation for their audit findings.

Financial analysts need to have strong communication skills to effectively present their findings to their clients. Auditors need to have strong communication skills to effectively communicate their findings to their clients. Both financial analysts and auditors need to be able to clearly and concisely explain complex concepts to those who may not have a background in finance or accounting.

Salary

Financial analysts earn an average salary of $71,352 per year, while auditors earn an average salary of $66,671 per year. Both of these salaries may vary depending on the size of the company at which you work, location of your job and the level of experience you have prior to pursuing either position.