Internal auditing is an absolutely essential role within any company, to ensure that daily operations run smoothly and all laws and regulations are adhered to. As an impartial watchdog, an internal auditor, “audits fiscal statements, expense reports, inventory and pretty much anything else that needs to be impeccable in case of an external audit by the Securities and Exchange Commission (SEC) or other governmental regulatory body.”
Internal auditors also help protect their company’s assets by mitigating risk, which can range from fraud or other legal exposure to internal mismanagement. They create risk assessments for each of their departments, part of a larger plan that schedules every minute detail of the company’s operations, and are responsible for overseeing internal accounting procedures and business operations. And because of their role as an impartial watchdog, internal auditors perform their duties largely autonomously and will generally report directly to the CEO of a publicly traded company.
The path to becoming an internal auditor starts with a bachelor’s degree in accounting, and usually includes a master’s degree as well. Because internal auditors are required to have their CPA designation before they’re able to file reports with the SEC, regulations in most states require 150 credit hours of education to receive the CPA.
Additional certifications, which can greatly improve employability in their respective fields, include:
- Certified Internal Auditor (CIA) designation, granted by the Institute of Internal Auditors (IIA) after passing a four-part test
- Certified in Control Self-Assessment (CCSA)
- Certified Government Auditing Professional (CGAP)
- Certified Financial Services Auditor (CFSA)
- Certified Information Systems Auditor (CISA) accreditation, granted by the nonprofit organization ISACA
- Certified Management Accountant (CMA) designation, granted by the Institute of Management Accountants (IMA)
In their publication, All in a Day’s Work, the Institute of Internal Auditors IIA identified the following tasks that, depending on the structure and maturity of the business they work for, internal auditors may perform:
- Offer insight and advice
- Evaluate risks
- Assess controls
- Ensure accuracy
- Improve operations
- Promote ethics
- Review processes and procedures
- Monitor compliance
- Assure safeguards
- Investigate fraud
- Communicate results
As you may expect, the most important skill for an internal auditor is meticulous attention to detail. A significant part of the job is “following detailed checklists and spending hours upon hours scanning vast reams of numbers to catch anything that stands out.” A high level of integrity and the ability to work autonomously are also important, as internal auditors are largely entrusted with a company’s financials and must work independently to uncover any potential errors before they become issues. Finally, a solid business sense and judgement are necessary to make recommendations based on the facts uncovered, plus the ability to communicate them clearly to stakeholders.
Internal auditors provide their businesses with tremendous value. They are impartial watchdogs, protecting the company from internal errors and ensuring compliance with external regulations. They are independent advocates for the best interests of the business, mitigate risks, improve efficiencies, and identify opportunities – and all with a fact-based approach.