Public vs. Private Sector Audit Jobs
All types of auditors, whether IT Auditor, Internal, External, Risk, or Compliance professional, come to a stage in their careers where they must choose between working for a private company or the public sector.
What does Public vs. Private mean?
The public sector involves organisations pertaining to public interest, such as Education, Transport, or Health. The public sector is usually operated by the government and not designed for the financial profit of its owners. Structures and hierarchies within the public sector vary between industries and regions and the objective of these organisations is the benefit of society.
Private companies, ranging from family businesses to global, publicly-trading corporations, are not part of the government. Their profits are designated at the operators’ prerogative, often for good old capitalist gain, and companies’ objectives can differ vastly.
Similarities between Public and Private
Public and private auditing have fundamental similarities. An auditor in a private company and an auditor in the public sector will have the same qualifications: a Bachelor’s degree in Finance, Business, or similar, they will apply the same basic principles to their work and are expected to comply with the same independent auditing standards. Both types of auditors are expected to be unbiased with no vested interest in the organisation that they audit. Furthermore, auditors in both private and public sectors must commit to the accuracy of their reporting.
Differences between Public and Private
Now we draw towards the factors that cause individual auditors to variegate. Most auditors in the public sector focus on cyber safety, information systems performance, and security. Unlike auditors working for private sectors, they are only provided with limited information on financial statements and they focus more on providing services rather than monitoring income, taxes, and profits. They typically report to a minister or departmental head.
Alternatively, auditors working for private sectors focus more on auditing the financial statements of the companies. Their main task is to ensure the proper presentation of financial reports to help shareholders and to portray the company’s financial standing. They are hired to ensure that companies are operating in the best interest of their investors.
What does a Public/Government Auditor do?
Auditors who are working for the government evaluate public funds. It is their job to ensure that these funds were used appropriately. Public internal auditors audit the financial records of government agencies and check if they comply with financial standards. Meanwhile, public external auditors check the activities of the recipient of the government funds to ensure that the public money was spent according to established governing allocation. Any discrepancies that these auditors find can result in civil or criminal consequences. The need for auditors to be unbiased and have no vested interest in the organisation they are auditing becomes clear here.
What does a Private Auditor do?
Companies, particularly those with publicly traded stocks, are required to hire an auditor at least once a year to have their policies, financial statements, and procedures checked to ensure that they conform to Generally Accepted Accounting Principles. The main goal of the audit is to assure stockholders that the assertions and financial statements provided by the company are accurate and complete. Aside from checking financial statements, auditors are also expected to review the segregation of duties within the company. This is to create a system of checks and balances inside the organisation. For instance, the person who submits an invoice should not be the same person who approves it and makes payment.
Now, Get to the Nitty Gritty
Depending on the country in which you work, auditors who work for the public sector generally earn more than their private sector counterparts. This could be attributed to the government maintaining work standards that they themselves set, or the effect of Trade Unions, or because governmental organisations are less concerned with making a profit. However, the private sector can offer more grandiose career progressions and with that comes better pay.
Work hours of public and private auditors differ as well. Public auditors often work shorter, fixed hours. Based on findings, public auditors typically work for 37.5 hours per week while private auditors can work at least 45 hours per week. A public auditor working overtime will, more than likely, be accruing penalty rates or time in lieu, whereas a private auditor may be pressured into overtime hours by company culture.
Similar to choosing internal or external audit, the company culture of your workplace can greatly affect your contentment. Perhaps you value a familiar work family or perchance you enjoy rubbing noses with a variety of clients.
In terms of graduating to an international audit career, government organisations and the public sector are more likely to be recognised institutions overseas, whereas a private company’s notoriety is dependent on the magnitude of the brand within any particular industry.
So which one do I choose?
Of course, an audit career in a private company and an audit career in the public sector are not mutually exclusive, nor are you pinioned to only one sector; gaining experience in both areas can only be beneficial. In some cases, accountants are required to spend a year or two in the public sector in order to gain professional credentials. Your decision at any time should be determined by what works best for you as an individual professional. Perhaps you have altruistic motivations and wish to serve the public, or you harbour a flagrant desire for career progression, or you may want big brand power on your resume. Visualise where you want your audit career to take you and use the differences between the sectors to determine which option will work best for you.