Tax Auditor: Job Description and Education Requirements
Tax auditors ensure that individuals and companies comply with local, state and federal tax laws. They also advise their clients on tax issues and assist with tax filings. A college education is usually required, and professional certification can improve employment potential.
Job Description of a Tax Auditor
Tax auditors evaluate the finances of a company, individual, agency or organization to ensure they're in accordance with tax laws and regulations. They use principles and practices of accounting, such as internal controls and record keeping, to accomplish this. Specific functions of a tax auditor are based on whether they're auditing a company, government agency or an individual. Some specific functions of a tax auditor could include:
- Determining tax liability
- Examining tax returns
- Assessing assets
- Auditing payroll and records
- Interviewing financial stakeholders
- Advising on tax laws and regulations
- Preparing reports of audit results
Internal audits are performed by an employee within an organization. These audits can serve multiple purposes, including the identification of fraud, wasteful spending and mismanagement of funds. Internal auditors could be responsible for assessing records and recommending improvement for efficiency, compliance and data security.
External audits are performed by an impartial third party, often a Certified Public Accountant (CPA) from an accounting firm. For the purpose of tax audits, the auditor might advise the client on tax advantages and file tax forms for the company.
Government employees, such as those that work for the Internal Revenue Service (IRS), ensure the accuracy of governmental records and provide random tax audit services for companies, nonprofit organizations and individuals. They evaluate corporate and individual tax returns, expenditures, receipts and bookkeeping practices to ensure compliance with tax codes and regulations.
Education Requirements for Tax Auditors
According to the U.S. Bureau of Labor Statistics, most auditor positions require a bachelor's degree in accounting, though some employers might favor those with master's degrees in business or accounting (www.bls.gov). Graduates of associate degree programs and those with related experience as accounting clerks or bookkeepers might qualify for some entry-level positions under the supervision of a licensed or experienced auditor.
Certification and Continuing Education
Federal law requires those who submit reports to securities exchanges must earn CPA certification. The licensure exam is administered by a State Board of Accountancy. Usually, applicants need a degree to qualify for testing, though some states allow experience in the field to substitute for educational requirements. Those with CPA certification often must complete a determined number of continuing education courses or credits to maintain the designation.
A number of associations offer continuing education opportunities and additional certification options. Organizations, such as the American Institute of CPAs, the Association for Accountants and Financial Professionals in Business and the National Association of State Boards of Accountancy, offer conferences, seminars, self-study guides and online resources that can offer continuing education credit. Professionals can also choose to earn supplementary certifications, such as the Certified Management Accountant or Certified Financial Manager, to establish expertise in a variety of accounting practices and controls.
Employment Outlook and Salary Information
The U.S. Bureau of Labor Statistics (BLS) reports that employment of tax examiners, tax collectors and revenue agents - all of whom work for goverment agencies - was expected to decrease 4% between 2012 and 2022. The number of jobs for accountants and auditors during the same time period were predicted to rise 13%.
As of May 2013, tax examiners, tax collectors and revenue agents earned median salaries of $50,610. During that time, accountants and auditors made a median of $65,080 per year, according to the BLS.
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