Internal auditors serve as corporate watchdogs, working to ensure companies and their employees comply with laws and regulations, monitoring risks, and evaluating internal controls. They also inspect and oversee all financial statements, expense reports, inventory and IT controls to ensure adherence with governmental regulatory procedures and guidelines.
Internal auditors find and investigate fraud within an organization, providing oversight that keeps businesses running at peak performance. When working within a publicly traded company, internal auditors report to audit committees within the company’s board of directors to maintain independence from the company’s management. Such a structure allows for fair and impartial fraud reporting regardless of the parties involved.
“Internal auditing provides insight into an organization’s culture, policies, procedures, and aids board and management oversight by verifying internal controls such as operating effectiveness, risk mitigation controls, and compliance with any relevant laws or regulations,” internal auditing firm KirkpatrickPrice said in “5 Reasons Why Internal Audit is Important.”
The professional growth for anyone considering an accountancy career or the internal auditor career path is promising. The Bureau of Labor Statistics (BLS) said the internal auditing profession would grow 10% from 2016 to 2026, which is faster than the average of all occupations across the United States. At the same time, staffing agency Robert Half listed internal auditors as one of the best roles in accounting and finance today, partially due to the increase in international mergers and acquisitions. The Institute of Internal Auditors (IIA) said internal auditors are crucial to the future of business.
“Many organizations achieve greatness through growth — and one of the keys to successful growth is effective risk management,” the IIA said. “Risk impacts an organization’s ability to compete and to maintain its financial strength and quality of its products and services.”
Internal Auditor Job Responsibilities
Internal auditors provide objective, independent and impartial reviews of a company’s internal control structure. In some cases, the duties may overlap with that of Certified Public Accountants (CPAs). However, when working in large companies, internal auditors have very focused responsibilities, including:
- Operations Analysis
Internal auditors review company procedures and operations to confirm they are correctly implemented to support the company’s objectives and goals. They put together reports that summarize findings and make recommendations for future adherence.
Internal auditors also determine whether assets are being adequately used and protected. Assets include tangible items such as computers and printers and intangibles such as workforce and knowledge management.
- Compliance Review
Internal auditors stay abreast of current regulations and legislation and explain the impact that non-compliance would have on the organization. They also report instances of non-compliance to senior management.
- Control Recommendations
Internal auditors evaluate and test the efficiency and effectiveness of current controls to determine if they mitigate risks. They make recommendations based on their extensive reviews and company objectives and missions.
- Safeguard Assurances
Internal auditors review how a company protects its assets and makes recommendations if the appropriate safeguards are not in place.
In doing the work, internal auditors are committed to integrity and accountability for the best possible outcome, the IIA said. They provide objective and independent advice to all levels of management.
“As such, independence and objectivity are two of the most critical components of an effective internal audit activity,” the organization said. “Internal auditors occupy a unique position as they are employed by the organization but are expected to review the conduct of its management.”
Internal auditors follow the Generally Accepted Accounting Principles (GAAP), which are accounting standards adopted by the U.S. Securities and Exchange Commission (SEC).
Working as an Internal Auditor
The BLS said internal auditors, along with all other accountants and auditors, earn $69,350 per year or $33.34 per hour. The profession is expected to grow by nearly 140,000 jobs from 2016 to 2026 because of the growing economy. In its 2019 Accounting & Finance Salary Guide, Robert Half determined these salaries for internal auditors:
- Chief audit executive: $175,250
- Internal audit manager: $112,750
- Internal auditor (senior): $87,250
- Internal auditor (one to three years of experience): $71,000
- Internal auditor (up to one year of experience): $46,250
The IIA said the leading job candidates come from a variety of backgrounds, including information technology, finance and marketing.
Employers seek job candidates who possess both soft and hard skills, including leadership, project management and clear communication. Most businesses prefer internal auditors who have earned an accounting master’s degree, including a master’s in accountancy online, and a Certified Internal Auditor (CIA) or Certified Public Accountant (CPA) designation.
About the University of North Dakota’s Master’s in Accountancy Online Program
UND’s online MAcc program prepares students to master accounting principles and learn in-demand skills in the field of finance. The program offers a professional track and a fundamentals track, allowing students to tailor their education to their career preferences. In the Professional Track, students can focus their education on concentrations that include data analytics, public administration and organizational leadership. For students who have no previous accounting experience, the Fundamentals Track helps build a foundation in financial, audit, managerial and tax accounting.
UND MAcc graduates consistently beat the national average on the CPA exam and go on to work in internal auditing. The program is housed within the University’s College of Business & Public Administration, which has been recognized in the top 5% of business schools worldwide with accreditation from the Association to Advance Collegiate Schools of Business (AACSB). For more information, contact UND now.
5 Reasons Why Internal Audit is Important: KirkpatrickPrice
A Look Ahead: Internal Audit Hiring and Salary Trends: Robert Half
What Does A Career As An Internal Auditor Look Like? Wiley
Internal Auditing: Assurance, Insight, and Objectivity: The Institute of Internal Auditors