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Internal auditors help safeguard organizations by analyzing compliance, risk, and potential. They examine company documents and data to identify issues like regulatory noncompliance, data inaccuracies, and employee theft.
Internal auditors work in many different industries, including healthcare, tech, education, and government. Internal auditors usually hold full-time positions, but they can also work as contractors for shorter auditing projects.
People who are good with numbers and like to work on their own often excel in this career field. Internal auditors report their findings to other internal stakeholders, but they complete most of their work independently. Like other accounting professionals, internal auditors need strong critical thinking skills and sharp attention to detail.
Internal auditors are in high demand. In 2019, human resource consulting firm Robert Half identified internal auditing as one of the most in-demand accounting and finance roles. Keep reading to learn about skills, education, and career paths for internal auditors.
What Does an Internal Auditor Do?
Internal auditors examine and analyze company records and financial documents. They identify issues like compliance concerns, risks, fraud, and data inaccuracies. After reviewing all records within their audit's scope, they investigate any problems they find.
Internal auditors use their knowledge of laws, industry regulations, and company policies to identify potential instances of noncompliance, fund misappropriation, and other risks to the business.
An internal auditor's job description usually includes the following responsibilities.
- Financial Record Examination: Internal auditors carefully examine a company’s financial records to identify areas of risk or concern.
- Compliance Analysis: By leveraging their knowledge of industry regulations and company policies, internal auditors identify potential noncompliance.
- Risk Management: When reviewing internal data and records, internal auditors look for areas of financial and legal risk.
- Theft and Fraud Detection: Internal auditors seek out internal fraud and theft. This can include misuse of funds, embezzlement, time fraud, and employee theft.
- Communication: Internal auditors need to communicate key findings from their audits orally and in writing as requested.
Key Hard Skills for Internal Auditors
Accounting Software Proficiency: Internal auditors must navigate their organization’s accounting software. Specific software programs vary by employer, but internal auditors should have some training or experience with common accounting tools like QuickBooks.
Math Skills: Internal auditors need strong mathematical skills to understand and evaluate financial documents and data. They should be able to calculate margins, percentages, and averages.
Accounting Principles Knowledge: These professionals need solid familiarity with accounting principles. In particular, they should understand and know how to apply the generally accepted accounting principles.
Understanding of Relevant Laws and Policies: Since internal auditors focus on compliance, they need a firm grasp on applicable laws and policies.
Key Soft Skills for Internal Auditors
Critical Thinking: Strong critical thinking skills can help auditors approach data trends and issues from a strategic and analytical perspective.
Attention to Detail: Internal auditors spend most of their time drilling down into complex data. They must identify issues that most people would overlook. Successful internal auditors should pay attention to details and carefully review every item and number in a document.
Ability to Work Independently: Internal auditing is a good career path for self-motivated people. Although internal auditors need to communicate with other internal team members, they do most of their work alone.
Communication: Internal auditors need to communicate complex information clearly. When they present audit findings, they may have to adjust their communication approach so that people with limited accounting knowledge can understand the key takeaways.
Internal Auditor Areas of Expertise
Internal auditing is a broad field that provides many professional opportunities and career paths. Internal auditors can specialize in various areas depending on their interests and career goals.
So, what does an internal auditor do in different industries? Let's take a look at three popular specializations.
Healthcare Internal Auditor
Healthcare internal auditors provide auditing services for healthcare organizations. They may work for medical facilities or providers like hospitals, medical research centers, and physician group practices. They can also find jobs with health insurance companies and healthcare systems.
Increased compliance requirements for healthcare organizations generate high demand for internal auditors in this field. There is even a special certification available for internal auditors working in healthcare. The certified healthcare internal audit professional credential is available to internal auditors with professional experience in the healthcare sector.
Common Job Titles
- Internal Auditor
- Staff Auditor
- Audit Director
- Senior Auditor
- Compliance Manager
- Audit Executive
Public Sector Internal Auditor
Federal, state, and local government agencies often hire internal auditors. Since government entities run on public funding, they have a special responsibility when it comes to financial compliance and budget management.
Internal auditors identify areas of waste or misuse and make sure that all policies and regulations are being followed. Public universities and educational districts also employ internal auditors.
Common Job Titles
- Internal Auditor
- Senior Internal Auditor
- State Auditor
- Government Internal Auditor
- Financial Auditor
- Supervisory Auditor
Internal Auditing Consulting
Businesses may bring in internal auditors as contractors or through a consulting firm. These auditors may perform basic internal audit services or focus on special projects such as sustainability auditing.
Major consulting firms like Deloitte and PricewaterhouseCoopers offer internships in their audit and assurance departments. These opportunities can benefit students and recent graduates looking to get into internal auditing. Consulting and accounting firms have clear advancement structures that take employees from internships to entry-level roles up into management.
Common Job Titles
- Internal Auditor
- Audit and Assurance Consultant
- Internal Auditing Consultant
- Audit and Assurance Sustainability Associate
- Risk and Regulations Internal Audit Associate
- Senior Internal Audit Associate
- Audit and Assurance Manager
How to Become an Internal Auditor
What is an internal auditor's career path like? Most professionals in the field start with a bachelor’s degree in accounting or a related major such as finance or business administration. However, further education or certifications can help auditors qualify for higher-level positions.
Students willing to spend 1-2 more years in school may want to consider a master’s degree in accounting. Employers may also look for candidates who have passed the certified internal auditor (CIA) exam. Internal auditors focused on fraud and theft detection may benefit from a certified fraud examiner certification.
What Is an Internal Auditor's Salary and Career Outlook?
The Bureau of Labor Statistics projects job growth of 6% for accountants and auditors from 2021-2031. The skills and knowledge built through working as an internal auditor can translate into many opportunities. Internal auditors can take on advanced auditing, corporate governance, and risk management roles. They can even become chief financial officers.
Internal auditors earn an average annual salary of $60,950 as of August 2022, according to Payscale. As with most professions, salaries vary based on location, industry, and experience.
Career Spotlight: Musheer Alambath
Can you explain the difference between an internal auditor and an external auditor?
Internal auditors are employees of an organization whose responsibility is to assist management in achieving the organization's tactical and strategic objectives by identifying and assessing risks that could deter from meeting these objectives.
External auditors are third-party firms hired by the organization to independently review and confirm the accuracy and completeness of the financial statements.
An external auditor's role is primarily limited to the financial risks, while an internal auditor's role would span operational, credit, and market risks facing the organization.
Why did you become an internal auditor? What initially interested you about the field?
Internal auditing is a field where you must constantly learn and develop yourself to enhance your knowledge and skills and improve your credibility among key stakeholders. Unlike some other jobs, a day in the life of an internal auditor is never the same.
There is no routine, as you could be working on different assignments that could challenge your intellectual ability, problem-solving capabilities, and ability to clearly communicate and present a compelling message. The opportunity to continuously learn and develop attracted me to becoming an internal auditor.
What education (degrees, certifications) did you need or want to pursue this job?
At a minimum, you need a bachelor's degree, preferably with coverage of business subjects, economics, and finance. A master's degree in business or finance is an added advantage. A certification in internal audit, such as certified internal auditor, would help you understand the intricacies of being an internal auditor and help you succeed in the job.
I started my career as a trainee internal auditor after completing my bachelor's and master's in business, specializing in finance. I went on to do my CIA and CPA while working as an internal auditor.
What did a typical day as an internal auditor look like for you? What do you see auditors doing now that may be different?
There is no typical day for an internal auditor as you would be working on different audits with different stakeholders and in different geographies depending on the company.
You are always meeting new people and helping them manage their risks effectively, sharing the best practices you have seen across the organization, and convincing them to take positive action to meet its objectives.
"Organizations increasingly turn toward internal auditors to provide consulting services, given the depth of knowledge they possess and their unique skill sets."
During my initial days as an internal auditor, I was in a different city four out of five days a week. As soon as I return home after an engagement, I will prepare to head out on another one.
Auditors now would be doing the same but more activities virtually than in person. Also, the tools they use to assess risks and provide insights to stakeholders would be more advanced. Internal auditors increasingly use data analytics and artificial intelligence to perform their analysis and extract meaningful results.
Was your transition from internal auditing to consulting difficult? How did auditing prepare you for your current role?
My transition was smooth, though there were unique aspects within consulting I needed to learn. Internal auditing and consulting have a lot of similarities. Internal auditing has evolved over the years to be more of a consultant than a "document checker." Organizations increasingly turn toward internal auditors to provide consulting services, given the depth of knowledge they possess and their unique skill sets.
Internal auditors' focus area has seen a significant shift from being hindsight-oriented to providing foresight, and that's how they are increasingly becoming part of strategic decision-making within organizations. With this shift, internal auditors today are being seen as in-house consultants and business partners.
What are some of the most rewarding aspects of working as an internal auditor? Some of the most challenging aspects?
Continuous learning, working on complex problems, exposure to different levels of management, being an integral part of an organization's growth journey, and a non-monotonous working day are the most rewarding aspects.
One of the biggest challenges is educating people and trying to change the negative perception of the words "audit" and "auditor," where people think the primary function of an internal auditor is to find mistakes in their work.
What do you think is the most important skill internal auditors need to succeed?
Be in a learning mode always, not under the assumption that you know everything or are an expert. This would help you absorb new information, gain insights, and add more value to the organization.
What advice would you give to students considering the job?
Research emerging topics and be at the forefront of the latest trends. An internal auditor's greatest assets are their knowledge and the ability to turn that knowledge into valuable insights for the stakeholders.
Musheer Alambath is a director within KPMG's consulting practice and a global financial services professional. He started his career as an internal auditor, and in his last role as vice president, group internal audit for an international bank, he was responsible for managing global teams across the network, which extends to 18 countries over 150 locations.
Musheer is a Sloan Fellow at the Stanford Graduate School of Business and was a keynote speaker at Stanford University's LOWkeynotes on an alternative financial solution to end global poverty.
Having worked on banking sector projects across four continents, he is passionate about making a difference for two billion people globally who currently have no access to financial services, using in-depth understanding and knowledge of financial products and services across different markets. He has presented his ideas through a TEDx talk on improving access to financial services using technology.
Musheer is a certified internal auditor and certified public accountant, and served on the board of Institute of Internal Auditors.
Questions About the Internal Auditor Job Description
What is internal auditing in simple words?
Internal auditing is the process of reviewing and analyzing a company's financial documents and data. Internal auditors ensure that this information is accurate and that the company complies with all applicable laws or regulations.
What qualifications do you need to be an internal auditor?
Internal auditors typically need at least a bachelor's degree. Many roles also require candidates to become a certified internal auditor by meeting work or educational qualifications and passing the certification exam.
What are the duties of an internal auditor?
Internal auditors review company data and financial documents, assess financial risk, identify fraud, and maintain accurate records.
What are the top five skills required for an internal auditor?
Internal auditors need strong math, computing, and critical thinking skills. They also need excellent attention to detail and thorough accounting knowledge.
What is the difference between internal auditor and accountant?
Accountants typically prepare financial documents and tax filings. Internal auditors review company documents for accuracy and compliance.
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