What Does an Internal Auditor Do?

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Internal auditors are crucial to the integrity of a business or enterprise. They investigate financial and professional records to ensure companies and their employees comply with laws and regulations, monitor risks and evaluate internal controls. They inspect and oversee all financial statements, expense reports, inventory and IT controls to ensure an organization’s compliance with government regulations and guidelines.

Professional growth is promising for anyone considering an accountancy career or the internal auditor career path. The U.S. Bureau of Labor Statistics (BLS) projects that between 2020 and 2030, the internal-auditing profession will grow by 7%.

Internal auditors’ work is integral to a transparent and fair economic system. For those interested in the challenges and rewards of a career as an auditor, the first step is to acquire the skills the role requires. An advanced degree such as a Master of Accountancy (MAcc) offers students a strong foundation in accounting and auditing principles and prepares them for the job market.

What Is an Internal Auditor?

Internal auditors are responsible for identifying and investigating fraud and providing oversight that keeps businesses running smoothly and transparently.

When working for a publicly traded company, an internal auditor reports to audit committees of the company’s board of directors to maintain independence from company management. This structure allows for fair and impartial fraud reporting, regardless of the parties involved.

An internal auditor generally works in an office, whether their own or in the organization or department where they are performing an audit. Auditors usually work full time, with increased work hours during tax season or quarterly audits.

Internal Auditor Job Description

Internal auditors provide objective, independent and impartial reviews of a company’s financial control structure. In some cases, their duties may overlap with those of an accountant or certified public accountant (CPA). However, when working in large companies, internal auditors have very focused responsibilities.

Operations Analysis

What does an internal auditor do? Internal auditors review company procedures and operations to confirm they are correctly implemented to support objectives and goals. Auditors put together reports that summarize findings and make recommendations to ensure future compliance with business regulations and policies.

Internal auditors also determine whether business assets are being adequately used and protected. Assets include tangible items such as computers and printers and intangibles such as an organization’s workforce and knowledge management.

Compliance Review

Internal auditors stay abreast of current regulations and legislation and explain the impact that non-compliance would have. They also report instances of noncompliance to senior managers.

Control Recommendations

Internal auditors evaluate and test the efficiency and effectiveness of current business controls to determine if they mitigate risks. This part of the internal auditor job description includes making educated recommendations based on extensive reviews of 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.

As articulated by the Institute of Internal Auditors (IIA), internal auditors are committed to integrity and accountability as they work to achieve the best possible outcomes for their employers or clients. They provide objective and independent advice to all levels of management.

To perform effective internal auditing, the auditor should possess independence and objectivity. Their position is powerful and unique, employed under the expectation that they can review the conduct of an organization’s management practices without the influence of bias.

Internal auditors follow generally accepted accounting principles (GAAP), which are accounting standards adopted by the U.S. Securities and Exchange Commission (SEC).

Internal Auditor Salary

The BLS reports that the median annual salary for an internal auditor was $73,560 as of May 2020, with the highest 10% of earners making over $128,000.

Compensation for internal auditors varies depending on the industry in which they work. Below are areas that commonly employ internal auditors, along with their 2020 median salary figures, according to the BLS:

  • Finance and insurance: $78,600
  • Company management: $76,230
  • Bookkeeping, tax preparation and payroll: $73,180
  • Government: $72,260

Employers seek internal auditors who possess soft skills such as leadership and clear communication and hard skills such as project management. Most businesses prefer job candidates who have earned a master’s degree in accounting, as well as a certified internal auditor (CIA) or certified public accountant (CPA) designation.

Accelerate Your Accountancy Education

Whatever you want to do as an internal auditor and whatever your goals, the proper educational foundation offers the power to define your own future.

The online MAcc program at the University of North Dakota prepares career changers to master accounting fundamentals and learn in-demand skills in accounting. The curriculum is designed to build a solid foundation in financial, audit, managerial and tax accounting and prepare students to score well on the CPA exam.

Learn more about how the online Master of Accountancy program at UND can open doors to a challenging and rewarding career as an internal auditor.

Recommended Reading:

Diversity in Accounting: Statistics, Benefits, and Challenges

How to Become an Auditor: Pursuing a Key Career in Accounting

Importance of Personal Accountability and Ethics in Accounting

Sources:

The Institute of Internal Auditors

Robert Half, “A Look Ahead: Internal Audit Hiring and Salary Trends”

U.S. Bureau of Labor Statistics, Accountants and Auditors

Wiley Efficient Learning, What Does A Career As An Internal Auditor Look Like?