What Is Internal Auditing?
Internal auditing refers to an analysis of a company’s internal controls, including its accounting processes and corporate governance. This type of auditing ensures compliance with tax regulations and laws. Throughout the internal auditing process, auditors must collect information and data to make suggestions on how companies can improve their efficiency and effectiveness. Internal auditing looks specifically at a company’s financial information and documents to understand its overall financial situation.
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Internal auditing pertains to an organization’s functions, since internal auditors make sure businesses run smoothly without straying from the laws and regulations put in place in the industry. This type of auditing combines analytical activities with knowledge of finance, economics, and tax regulations. Internal auditors work to protect companies against fraud situations.
What Is an Internal Auditor?
Internal auditors can work for a variety of organizations, including within the healthcare industry, on behalf of the federal government (including the IRS), for credit unions, or as financial controllers for other companies. These professionals review and analyze their company’s financial statements and data to ensure they meet the laws and regulations, keeping them from serious fines and penalties. They also review information to identify problems and make improvement suggestions.
What Does an Internal Auditor Do?
Internal auditors focus on analyzing and examining accounting records to determine a final financial status. They prepare reports detailing their findings for the sake of improving operating procedures and following certain guidelines, laws, and requirements. These auditors work with management to discuss their audit results, with an eye to using particular assets to make changes to financial activities and operations.
Internal auditors also review their organization’s accounting systems and account books to ensure their effectiveness and efficiency, making sure they follow specific accounting procedures.
Internal auditors should know how to use a variety of accounting software programs.
Internal auditors should know how to use a variety of accounting software programs, including Intuit QuickBooks. They should also understand fund accounting software, tax software, and Sage 50 Accounting software to ensure these systems run smoothly. Auditors should understand various scientific and analytical software programs, including Arbutus Analyzer and ACL Audit Exchange.
These auditors should know how to use enterprise resource-planning software, such as Microsoft Dynamics and Lawson ERP, and financial analysis software, such as Oracle E-Business Suite Financials. They should also boast excellent active listening skills, since these professionals work with other people and must understand their questions and concerns. In turn, auditors must hold strong speaking and writing skills to communicate effectively on all platforms to keep businesses and individuals up-to-date during the audit process.
Auditors should boast strong critical-thinking skills, as well, since their job requires them to take deep looks into the financial aspects of business to notice errors or room for improvement. They should know how to find these issues and make suggestions for solutions.
Auditors should boast strong critical-thinking skills, as well, since their job requires them to take deep looks into the financial aspects of business to notice errors or room for improvement.
Internal auditors work for a variety of companies and organizations, reviewing their pertinent financial information to keep them on track and functioning efficiently. Professionals in this field can go on to pursue other related careers as financial analysts, compensation and benefits managers, accountants, risk management specialists, market research analysts, and marketing specialists.
Professionals’ job functions in this field rely heavily on analytical responsibilities, requiring professionals in all positions to pay close attention to detail and exhibit impressive problem-solving and critical-thinking abilities.
Internal auditors’ daily work activities include vital decision-making and problem-solving to maintain efficient, effective business flow. These professionals research and analyze companies’ internal financial information and evaluate their results to suggest the most effective solutions. Internal auditors collect lots of information to perform their essential job functions, making observations and documenting their findings to compose an accurate audit report.
Auditing requires a professional’s undivided attention, for which reason auditors work best alone.
Another key function of the job is to communicate with supervisors and coworkers, keeping them updated on their audit process and letting them know how their findings might impact or implicate the company.
Internal auditors conduct most of their work independently. Auditing requires a professional’s undivided attention, for which reason auditors work best alone. However, they do rely on their managers and coworkers to help them conduct their audit and present them with certain information they might not have considered previously.
Most internal auditors hold a bachelor’s degree, often in finance or accounting, with a specialization in auditing. This specialization gives graduates more exposure to their chosen field and prepares them for the challenges they might face during their day-to-day roles as internal auditors.
What Qualifications Do You Need to Become an Internal Auditor?
||Internal auditors typically hold a bachelor’s degree in a finance-related discipline. Some finance and accounting programs offer specializations in auditing, allowing students to cater their degrees toward careers as internal auditors.
||Some companies prefer auditors to hold a master’s degree in a finance-related field, with a demonstrated focus in auditing.
||Internal auditors should understand written documents to perform proper analyses of them.
||This is one of the most pertinent skills for an internal auditor, as it permits them to review financial information and documentation so they can consider it from an analytical standpoint and make suggestions on how to improve processes.
||Internal auditors conduct much of their work independently, but they must effectively communicate their findings with management and their coworkers
||Internal auditors should be able to notice when something is not quite right or has the potential to go wrong.
||It’s critical for auditors to come up with sensible solutions based on their analyses.
|WRITTEN AND ORAL EXPRESSION
||Reporting on findings and ideas for improvements is one of the key functions of internal auditors, so these professionals should know how to express their work through written and oral modes.
|ADMINISTRATION AND MANAGEMENT
||Understanding how businesses function allows internal auditors to make the best suggestions to maintain or improve efficiency based on the findings of their audits.
|ECONOMICS AND ACCOUNTING
||Internal auditors focus their work on a business or organization’s financial information, so they should understand key concepts in accounting and economics.
Learn More About How to Become an Internal Auditor
How Are Internal Auditors Employed?
Internal auditors work in private or public sectors, often for the Internal Revenue Service (IRS). Most auditors in the public sector conduct their work under the IRS, but those in the private sector often work in credit institutions and the healthcare industry. Auditors also work in government roles at the state level. Additionally, internal auditors can operate on a flexible basis in any organization.
Some organizations hire their own personal auditors, referred to as controllers. These auditors review the financial documents and accounting books for their organization, identifying issues and making suggestions to improve processes and information within their company. Internal auditors work with financial information, often in settings that require them to understand tax laws and regulations. These professionals ensure their companies adhere to the laws in place and run efficiently and effectively.
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Professional Organizations for Internal Auditors