Internal auditors (IAs) conduct an objective analysis and evaluation of a company's financial and business operations, identifying problems and ensuring compliance with industry and government regulations. IAs examine financial statements, interview concerned stakeholders, review operational accounts, document inventory levels, and perform any other activity necessary to formulate an accurate assessment of a company's state of affairs. They often make recommendations and suggest concrete paths of action for the company to take at the end of their audit.
How to Become A Certified Internal Auditor (CIA)
Founded in 1941 and based in Lake Mary, Florida, the Institute of Internal Auditors (IIA) boasts more than 190,000 members in over 170 countries. It administers the certified internal auditor (CIA) exam and stands as the only organization in the world granting the prestigious CIA designation.
The CIA credential presents the holder as a credible and trustworthy professional who possesses a thorough understanding of the principles contained in IIA's International Standards for the Professional Practice of Internal Auditing. Competent accountants can take on many of the responsibilities of a CIA, but companies and organizations know a CIA designation is an indication of a knowledgeable and well-trained practitioner who answers to the highest professional and ethical standards. Because of this, CIAs tend to find work in a greater variety of fields and industries.
Why Become a Certified Internal Auditor?
The Bureau of Labor Statistics projects a 10% growth rate for the accounting and auditor professions between 2016 and 2026. Additionally, a diverse range of companies, private organizations, and government agencies often need the services of a well-trained CIA. With a CIA designation, internal auditors demonstrate their qualifications and are positioned to take advantage of a robust job market. The benefits of becoming a CIA include:
- ✓International Credential
- ✓Increased Earning Potential
- ✓Job Security
- ✓Opportunities for Professional Advancement
- ✓Focused Skills Improvement
✓ International Credential
The CIA designation is recognized and respected all over the world. Other accounting and financial management certifications, including the certified public accountant and the financial risk manager designations, do not enjoy international recognition. CPAs and FRMs need to go through another credentialing process or take additional exams when moving outside the credentialing body's area of jurisdiction.
✓ Increased Earning Potential
According to a study done by the IIA, CIAs increase earning potential by as much as 51% after earning the credential. On average, those holding a CIA credential earn $38,000 more annually than peers who do not. The designation also qualifies CIAs to take on additional responsibility, which often comes with a commensurate increase in salary.
✓ Job Security
Taking the additional step of earning a CIA designation speaks of a person's commitment to the field and profession. Employers value talents who display initiative, perseverance, and foresight by investing in their professional future. They are more likely to hire and retain such employees.
✓ Opportunities for Professional Advancement
The CIA designation often positions certificate holders for executive and leadership roles within their company or organization. Additionally, it expands the professional arenas where CIAs can practice, since it is a highly desirable credential in virtually any industry. Many CIAs also get the chance to impact the profession at the policy-setting level.
✓ Focused Skills Improvement
The CIA exam measures breadth and depth of a test-taker's skills and knowledge solely in the field of internal audit. Earning the credential presents its holder as a practitioner with a solid grasp and thorough understanding of a complex and demanding professional arena.
Understanding the Certified Internal Auditor Exam
The CIA examination is made up of several components. This section outlines exam requirements, test topics, registration and payment, and other relevant information about the CIA examination.
Frequently Asked Questions for the Certified Internal Auditor Exam
What Does an Internal Auditor Do?
When Is the CIA Administered?
IIA gives test takers flexibility, since there are no testing windows and candidates can sit for the exam any time of the year.
Where Can I Take the CIA Exam?
Pearson VUE administers the CIA exam at more than 900 testing centers around the world. Where a test taker completes the exam bears no relevance to the outcome of the exam.
How Is the CIA Exam Taken?
CIA uses a fully computerized delivery mode. Test takers receive an unofficial score as soon as they turn in their exams at the testing center.
How Often Can I Take the CIA Exam?
IIA does not limit the number of times the CIA exam can be taken. However, there is a 90-day waiting period to retake previously failed portions of the exam, and a 180-day limit from the date of registration for registrants to take the exam.
Fulfilling the CIA Exam Requirements
Before sitting for the CIA exam, candidates must meet the educational and work experience requirements set by the IIA. Test takers unclear whether their educational or work experience meets IIA standards should contact a local IIA chapter prior to registering for the exam.
In general, candidates must have at least a bachelor's degree from an accredited college or university to sit for the CIA exam. The undergraduate degree can be in any field of study. However, IIA provides alternative eligibility paths for candidates who do not meet this educational requirement.
Candidates with an associate degree or two years of postsecondary education and five years of verifiable work experience in the internal auditing (or related) field can register to take the exam. Additionally, candidates with less than two years of postsecondary education but have seven years of verifiable internal auditing experience can also register to take the exam.
Work Experience Requirements
Candidates with a bachelor's degree but no work experience must complete at least two years of professional experience as an internal auditor (or similar position). Candidates with no work experience in the field but hold a master's degree need only complete one year of professional experience in internal auditing or a related field. Candidates may sit for the exam while completing the work experience requirement. However, they must meet the requirements and complete the certification process within a four-year eligibility window or risk forfeiting all fees and completed exam components.
Exam Composition and Timing
As seen from the table below, the CIA exam consists of three parts that cover the essentials, practice, and business knowledge of internal auditing. Test takers should allow for ample preparation time for each section prior to taking the exam. IIA tests candidates at the proficiency level for the first two sections (essentials and practice) and at the awareness level for the business knowledge portion of the exam.
Part 1: Essentials of Internal Auditing
- Multiple-Choice Questions: 125
- Time Allotment: 150 minutes
- Topics Tested: Foundations of Internal Auditing (15%), Independence and Objectivity (15%), Proficiency and Due Professional Care (18%), Quality Assurance and Improvement Program (7%), Governance, Risk and Control (35%)
Part 2: Practice of Internal Auditing
- Multiple-Choice Questions: 100
- Time Allotment: 120 minutes
- Topics Tested: Managing the Internal Audit Activity (20%), Planning the Engagement (20%), Performing the Engagement (40%), Communicating Engagement Results and Monitoring Progress (20%)
Part 3: Business Knowledge for Internal Auditing
- Multiple-Choice Questions: 100
- Time Allotment: 120 minutes
- Topics Tested: Business Acumen (35%), Informational Security (25%), Information Technology (20%), Financial Management (20%)
Registration and Fees for the CIA Exam
Candidates can register for the CIA exam once they have met the educational requirements. They must also meet work experience requirements, but can complete those within a four-year eligibility window.
- How to Register: Create a profile in IIA's Certification Candidate Management System (CCMS). Fill out the application form, choose a mode of payment, and upload the required documents to the CCMS. Once IIA accepts a candidate's application, they may register and pay for the exam one portion at a time.
- What Is Needed for Registration: Once IIA approves a candidate's exam registration, it sends an "authorization to test" email to the candidate containing the instructions on how to schedule an exam date with Pearson VUE.
- When to Register: Most candidates need time to prepare for the CIA exam and it is often best to register for the exam after completing the necessary preparation. Since the exams are available year-round, candidates can register to take the exam at the time they are most ready.
Paying for the CIA Exam
IIA members pay a $118 registration fee ($230 for nonmembers), $280 for exam part one ($395 for nonmembers), and $230 each for exam parts two and three ($345 for nonmembers). Students and teachers pay discounted rates. Payments can be made online, by check, or via funds transfer.
Scoring the Certified Internal Auditor Exam
IIA continuously refines the CIA exam to make it more relevant and reflective of the developments in the industry. Thus, passing scores fluctuate according to the version of the exam given out that year.
What Score Do You Need to Pass the CIA Exam?
CIA exam scores typically range from 250-700. For most versions of the test, candidates must have a score of 600 or more to pass.
How Does CIA Exam Scoring Work?
IIA calculates a passing score on the CIA exam based on the degree of difficulty of each version of the exam. The number of correct questions needed to pass the exam may vary from one exam to another.
Who Scores the CIA Exam?
Pearson VUE administers fully-computerized CIA exams. The computer automatically scores each exam as it is turned in.
When Are CIA Exam Scores Released?
IIA releases official test scores through the CCMS within 24-72 hours of exam completion. Test takers who get a failing score receive a review of each topic they failed to help them improve their score the next time they take the test.
After the Exam: Maintaining Your CIA Certification
IIA expects all CIAs to maintain their certification status by completing the continuing professional education unit requirement. CIAs must earn 40 hours of CPE every year.
Preparing for the CIA Exam
Preparation plays a crucial role in passing the CIA exam. Plan ahead to make sure there is ample time to review topics you are already familiar with and research more difficult topics.
Top 10 Tips for Exam Preparation
- Know the Exam Coverage: Working from a syllabus of the test, divide exam topics into two groups – those you are familiar with and those you are not, then focus your review on topics that fall in the latter category.
- Practice Exam Questions: Answering practice exam questions helps you remember important facts and familiarizes you with the verbiage of the exam. It can also improve your test-taking skills.
- Set a Study Schedule: Find the ideal time, place, and conditions that help you learn best and discipline yourself to stick to your schedule as often as possible. A regular study schedule keeps you on track and helps you avoid cramming.
- Research Difficult Topics: Put extra effort in researching concepts that you find especially difficult. Taking this extra step helps you remember concepts better and find applications while you practice.
- Apply What You Study: Find practical applications for the concepts you are studying to make them become more concrete (and easier to remember) for the exam.
- Use IIA Resources: Visit a local chapter or join an online IIA forum. Many IIA members have taken the CIA exam in the past and can offer a wealth of practical tips on taking the test.
- Enroll in a CIA Exam Prep Course: By taking this step, you become familiar with both the form and content of the exam, making the actual test day less intimidating. You can find several prep courses online.
- Take Notes: This practice creates a visual map of what you study, helping you remember exam details. It also engages more of your senses, another effective memory aid.
- Study Case Histories: Case histories demonstrate how concepts and principles are applied in real-world situations,more easily understanding and recalling concepts easier during the exam.
- Become Familiar with the Test Format: The CIA exam follows a strict format and becoming familiar with it can help you can take the test in a more relaxed manner.
CIA Practice Exams and Study Resources
People learn at different rates and in different ways. A range of practice tests and study materials for the CIA exam exist and test takers can choose what works best for them.
- Self-Study Program: Test takers receive several different types of study materials in a variety of formats, including video tutorials, flash cards, practice exams, posttest reviews, and more, which can be accessed and taken at their own time and pace.
- Review Classes: Candidates can enroll in instructor-led classes online or onsite and learn from class discussions, comprehensive course materials, and instructor guidance.
- Manuals and Software: IIA offers a range of print and digital materials test takers can purchase as financial resources become available. Some items come at discounted prices for students and teachers.
- Practice Questions: Although candidates do not receive diagnostic information by answering practice test questions, they become familiar with the types of questions included in the exam, which can help in taking the actual test.
- Review Course: Candidates who only need a refresher on specific CIA exam areas can enroll in focused review courses, many of which are available online or offered onsite.