External auditors are an important profession in the business world, especially in maintaining the transparency of the company's financial statements. In contrast to internal auditors, external auditors are tasked with providing an independent assessment of the company's financial statements and compliance with accounting standards and applicable regulations.
This article will discuss in full about the definition, duties, roles, responsibilities, to the salary of external auditors, along with examples of its application in the company.
What Is the Definition of an External Auditor?
Simply put, an external auditor is an independent party outside the company who is licensed as a Public Accountant and provides audit services on historical financial information. Public Accountants generally work within a public accounting firm (KAP).
Under Law Number 5 of 2011 on Public Accountants, assurance services such as audits may only be provided by Public Accountants (Article 3 paragraph 2). The license to become a Public Accountant is granted by the minister responsible for finance, is valid for five years from the date of issue, and can be renewed (Article 5).
Unlike internal auditors which is part of the company, the external auditor does not have a structural relationship with management. This makes their opinions more trusted by investors, shareholders, and regulators.
Difference between external and Internal Auditors
| Aspect | Internal Auditor | External Auditor |
|---|---|---|
| Position | Works inside the company | An independent party from outside the company |
| Focus | Operational evaluation, compliance, and risk management | Objective examination of the financial statements |
| Users of the results | Management and the responsible parties in the company | Shareholders, creditors, investors, and regulators |
This article covers the profession. For the process and stages of an external audit, read the articles below.
See also:
- External Audit is: Knows 7 Differences, Steps, & Examples
- 7 Differences between Internal and External Audit, Let's Know!
- What is Auditor: Duties, Types, Code of Ethics, and Salary
Why Do Companies Need External Auditors?
- To increase the credibility of financial statements.
- As a condition of compliance with financial regulations.
- To convince investors and stakeholders that the company's financial statements can be trusted.
When Must a Company Use an External Auditor?
Under Article 68 paragraph (1) of Law Number 40 of 2007 on Limited Liability Companies, the board of directors must submit the financial statements to a public accountant for audit if the company:
- raises and/or manages public funds;
- issues debt acknowledgments to the public;
- is a public company;
- is a state-owned company (persero);
- has assets and/or turnover of at least IDR 50 billion; or
- is required by legislation.
If that obligation is not met, the financial statements are not approved by the General Meeting of Shareholders (RUPS). This law has been amended several times, so check the latest text before applying it.
For financial services entities, OJK Regulation Number 9 of 2023 also requires the use of public accountants and accounting firms registered with OJK and sets limits on the period they may be used.
See also:
- Audit Tenure: Definition, Benefits, formula, and how to calculate
- Audit rotation: definition, objectives, types, examples and regulations
What Are the Duties of an External Auditor?
The work of an external auditor includes several key responsibilities related to the financial statements and compliance of the company.
1. Able To Work Independently And As A Team
External auditors examine the annual financial statements to ensure that they comply with accounting standards (e.g. PSAK or IFRS).
2. Assess compliance with standards and regulations
Besides examining the numbers, external auditors consider the company's compliance with regulations to the extent they affect the financial statements, for example tax provisions. A dedicated compliance review is a separate engagement.
See also:
3. Provide An Independent Audit Opinion
The results of the audit will be set forth in the report audit opinion. This opinion is very important because it is a reference for investors and regulators in assessing the truth of the company's financial statements.
4. Provide Repair Recommendations
Although not a primary task, external auditors often advise on improvements related to the company's financial system or internal controls.
What Are the Working Stages of an External Auditor?
A general picture of the audit workflow for financial statements is as follows. The details are set out in the IAPI Auditing Standards (SA), among them SA 300 (planning), SA 315 (identifying and assessing risks), SA 330 (responses to risks), and SA 700 (reporting).
- Engagement acceptance and audit planning.
- Understanding the entity, then identifying and assessing risks of material misstatement.
- Responding to risks through tests of controls and substantive tests, and gathering audit evidence.
- Evaluating the results and forming an opinion.
- Issuing the independent auditor's report and communicating with management and those charged with governance.
See also:
- Complete Guide to the stages of Internal and external Audit
- Audit Evidence: Definition, Types, Characteristics, and Examples
What Opinions Can an External Auditor Give?
| Opinion | Short meaning |
|---|---|
| Unqualified (unmodified) | The financial statements are prepared, in all material respects, in accordance with the applicable financial reporting framework |
| Qualified opinion | There is a material but not pervasive misstatement, or evidence cannot be obtained and the effect is material but not pervasive |
| Adverse opinion | The misstatements are both material and pervasive |
| Disclaimer of opinion | The auditor cannot obtain sufficient appropriate evidence, and the possible effects are both material and pervasive |
See also:
- Audit Opinion: Definition, 4 Types, Stages, and Examples
- What is an unqualified opinion? - Definition, examples and how to get
- Qualified Opinion: Definition, Basis for Issuance, & Implications
- Unreasonable opinions on Auditing: definition, implications, and how to avoid
- What is opinion not expressing an opinion? - Definition and basis of awarding
What Is the Role of an External Auditor in a Company?
The role of the external auditor is not only limited to providing opinions, but also contributes to public confidence in the company.
1. Ensuring Transparency Of Financial Statements
External auditors ensure that the published financial statements reflect the actual conditions, so as not to mislead outsiders.
2. Become An Independent Party
Because it comes from outside the company, external auditors can provide an objective assessment without conflict of interest.
3. Increase Stakeholder Trust
Investors, creditors, and the general public will have more confidence in the financial statements that have been audited externally.
What Are the Responsibilities of an External Auditor?
In addition to basic duties, external auditors also have ethical and professional responsibilities.
1. Maintain independence and objectivity
An external auditor should not have personal interests that could affect the results of the audit.
2. Maintain Data Confidentiality
All company data obtained during the audit is confidential and should not be misused.
3. Conduct Audits According To Professional Standards
External auditors must follow the Auditing Standards (SA) issued by the Indonesian Institute of Certified Public Accountants (IAPI), which refer to the International Standards on Auditing.
4. Provide accurate reports
Each audit result must be clear, accurate, and not misleading to the users of the report.
Who Can Become an External Auditor and What Are the Requirements?
Article 6 paragraph (1) of Law Number 5 of 2011 requires a person to obtain a Public Accountant license:
- to hold a valid Public Accountant professional exam certificate;
- to have practical experience in providing assurance services;
- to be domiciled in the territory of the Unitary State of the Republic of Indonesia;
- to have a tax identification number (NPWP);
- to have never been subject to revocation of a Public Accountant license;
- to have never been convicted by a final court decision of a crime punishable by five years or more in prison;
- to be a member of the Public Accountant professional association designated by the minister; and
- not to be under guardianship.
Before reaching the Public Accountant level, many people start their careers as an assistant or junior auditor at a KAP, then move up to senior, supervisor or manager, and partner.
How Much Is an External Auditor's Salary?
The profession of external auditor has quite promising prospects in terms of earnings.
Factors affecting salary
- Location of the company and public accounting firm.
- The auditor's work experience.
- Sertifikasi profesional (CPA, ACCA, dll.).
- The size and complexity of the audited clients.
Salary range of external auditors in Indonesia
The figures below are estimates as of October 2026 and do not come from a single official source.
- Level Junior: Rp5 million-Rp8 million per month.
- Level Senior: Rp9 million-Rp15 million per month.
- Manager & Partner: can reach Rp20 million-Rp50 million per month, even more in large accounting firms.
The range above is an indicative estimate, not official data. The figures for senior level and for manager and partner are not based on an open survey, so treat them as a rough picture. For comparison, Jobstreet (October 2026) records average auditor salaries by city based on job postings, for example about Rp8.5 million per month in South Tangerang and about Rp6.4 million in South Jakarta. Actual pay depends on the size of the KAP, the city, experience, and certification.
External Auditor Career Prospects
Many external auditors have careers in reputable public accounting firms, then continue their careers in the corporate sector as financial managers or even directors.
What Are Examples of External Auditors?
Public accounting firm (KAP)
An example of an external auditor is a public accountant working at a KAP licensed by the Minister of Finance. For financial services entities, the public accountant and KAP must also be registered with the Financial Services Authority (OJK). Some well-known international firms are the Big Four: Deloitte, PwC, KPMG, and EY.
Companies that use external auditors
Companies that meet the audit requirement criteria, such as public companies, persero, or those that raise public funds, must use a public accountant for their annual financial statements.
Simple Case Study
For example, a large manufacturing company appoints an external auditor to ensure its financial statements match accounting standards and that there are no material errors. The results of the audit became the basis for foreign investors to invest more capital.
What Challenges Do External Auditors Face?
Although it looks prestigious, this profession has its own challenges.
A. Pressure to maintain independence
Many times external auditors face pressure from clients to make audit opinions more “soft”. This is where integrity is key.
B. Complexity Of Regulation
Accounting standards and financial regulations are constantly evolving. Auditors must constantly update their knowledge.
C. Industry Dynamics
Each industry has different characteristics, so auditors must understand the intricacies of their client's industry.
FAQ About External Auditors
What is an external auditor?
An external auditor is an independent party appointed by a company to audit its financial statements, generally from an officially licensed public accounting firm. Because they have no structural relationship with management, their opinion is more trusted by investors and regulators.
What is the difference between external and internal auditors?
Internal auditors work within the company and focus on evaluating operations, compliance, and risk management. External auditors come from outside the company and focus on examining financial statements objectively.
What are an external auditor's duties?
They examine the annual financial statements for conformity with accounting standards such as PSAK or IFRS, consider compliance with regulations to the extent they affect the financial statements, give an independent audit opinion, and may provide recommendations to improve financial systems and internal controls.
What are an external auditor's professional responsibilities?
Maintaining independence and objectivity without personal interests, keeping company data confidential, performing audits in accordance with the IAPI Auditing Standards, and delivering reports that are accurate and not misleading to users.
What is the salary range for external auditors in Indonesia?
It depends on the career level — from junior and senior to manager and partner — and is influenced by location, experience, professional certifications, and the complexity of the clients handled. The detailed ranges can be seen in the salary section of this article.
What challenges do external auditors face?
Pressure from clients for a softer audit opinion, making integrity key; the complexity of ever-evolving regulations and accounting standards; and industry dynamics that demand continuous knowledge updates.
Who issues a public accountant license?
Under Article 5 of Law Number 5 of 2011, the license to become a Public Accountant is granted by the minister responsible for finance. The license is valid for five years from issue and can be renewed.
When must a company be audited by a public accountant?
Under Article 68 paragraph (1) of Law Number 40 of 2007, among others when the company raises public funds, is a public company or persero, or has assets and/or turnover of at least IDR 50 billion.
Conclusion
External auditors are independent parties that have an important role in maintaining the credibility of the company's financial statements. They are tasked with examining financial statements, assessing compliance with regulations, and providing an objective audit opinion. This profession has great responsibilities, including maintaining the independence, confidentiality and accuracy of audit results.
With competitive salaries and bright career prospects, external auditors are becoming one of the demanded professions in accounting and finance.
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