Internal auditor career guide

What does an internal auditor do?

Are you interested in a career as an internal auditor? It’s an excellent career choice if you enjoy analyzing details. In this position, you can help a business or government agency use their resources efficiently and ethically.

Auditors explore how an organization manages funds, income sources, and internal controls.

Auditors explore how an organization manages funds, income sources, and internal controls. They review statements and analyze financial data. Then, they inform authorities regarding any mistakes, discrepancies, or potentially problematic areas.

Specific tasks for an internal auditor typically include:

• Reviewing, analyzing, and evaluating documents or procedures
• Reporting findings to management
• Recommending any necessary changes

Internal auditors typically work only within the organization they audit. Even so, they must be objective in reviewing financial data, procedures, and activities. They report findings to management, who can then implement any necessary changes. These analyses can help companies and government agencies identify potential issues like fraud, waste, and similar financial risks.

Internal auditors often play an essential role in communication within an organization.

Auditors notice patterns in data and make recommendations that can lower costs or improve efficiency. For example, they may notice that an alternate division of responsibilities could be more practical or economical. In a large company, internal auditors typically need to study each sector individually. By focusing on the minutia, they’ll be able to make more specific suggestions regarding effective management.

Internal auditors often play an essential role in communication within an organization. They have daily contact with policymakers in management positions and also with those implementing procedures. In this way, they can observe the effectiveness of policies and practices, and inform high-level executives of any that require explanation or modification.

Where do internal auditors work?

Many organizations and entities employ internal auditors. Some of these businesses include:

• Small businesses
• Large corporations
• Healthcare institutions
• Non-profit organizations
• Educational institutions
• Federal, state, or local government agencies

Some organizations may require that the internal auditor travel between multiple locations, such as a main office and branches. These might all be within the same city or region. If not, long drives or air travel could be necessary.

Earning a bachelor’s degree

To get into an undergraduate accounting program, you’ll need proof that you completed high school or a GED. Most colleges request a transcript, a minimum GPA of 2.5, and SAT or ACT scores. Some universities may require additional items like a personal statement or academic references.

Full-time students typically take 4 years to complete a bachelor’s degree, which consists of approximately 120 credit hours. Undergraduate coursework includes topics like:

• Financial and managerial accounting
• Profit planning and control
• Federal taxation
• Auditing
• Analysis of financial statements
• Accounting for healthcare institutions and non-profits

Earning a master’s degree

A master’s degree isn’t necessary for most internal auditing positions. However, if you hope to move into a management position, it can give you an advantage over the competition.

Entering a master’s program in business or accounting requires transcripts of your undergraduate work. You’ll need to show you have a bachelor’s degree in one of these areas. Sometimes, a similar degree, like one in finance, is acceptable. A minimum undergraduate GPA of 2.75 may be necessary, but will depend on the institution, along with a resume, personal statement, recommendations, and work experience. Some programs request GRE or GMAT scores. Essays and an interview may also be part of the admissions process.

If you study full time, a master’s degree usually takes 2 years to complete. Coursework for a master’s in accounting includes topics like:

• Advanced financial accounting
• Auditing theory
• Accounting ethics
• Taxation of business entities

In some instances, you can choose an audit specialization, including courses that cover topics like:

• Applied auditing
• Advanced auditing
• Accounting for acquisitions and mergers
• Information management and analytics technology

Accreditation

Accreditation is a means of certifying that educational institutions and programs reach high standards of quality. To ensure your degree meets national requirements and qualifies you for professional certifications in the future, you should make sure any institution you attend is accredited by an official agency.

The following agencies accredit schools and programs in business and accounting in the U.S.

• International Accreditation Council for Business Education (IACBE)
• Association to Advance Collegiate Schools of Business (AACSB)
• Accreditation Council for Business Schools and Programs (ACBSP)

Be especially cautious with online programs. Careful research will allow you to confirm whether the degree will be recognized on a national level.

Degree costs and financial aid

The cost of an undergraduate degree can vary significantly from one program to another. For example, yearly tuition for a bachelor’s degree in accounting is between $7,070 and $30,108. The numbers are similar for an undergraduate business degree, ranging from $7,024 to $31,210 annually. Tuition and fees for a master’s degree typically fall between $8,950 and $29,670 per year.

It’s wise to check with your school’s financial aid office regarding options for scholarships, grants, and loans. You can complete the Free Application for Federal Student Aid (FAFSA) to determine your eligibility for government assistance. One such opportunity is the Federal Work-Study (FWS) program.

Professional certification

The need for certification beyond your degree depends on the position you seek. Some employers require one or more certifications. Others may not make it mandatory but it’s still preferred. Regardless, holding a professional credential is typically helpful for your resume.

Here are several certifications an internal auditor might opt for:

Certified Internal Auditor (CIA)

This qualification is awarded by the Institute of Internal Auditors (IIA) and recognized worldwide. It’s typically necessary for advancement to senior internal auditing positions. To obtain this certification, the candidate goes through a series of steps, including:

• Submission of identity documents and character references
• Proof of degree completion at an accredited institution
• Passing an exam
• Showing experience in the field

The IIA accepts multiple education and experience levels for this qualification, including:

• An associate’s degree or less, plus 5 years of internal auditing experience
• A bachelor’s degree with 2 years of experience
• A master’s degree and 1 year of internal auditing experience

According to the IIA, professionals with a CIA credential can increase their earning potential as much as 51%. The Internal Audit Practitioner Designation is a preliminary qualification that shows a candidate is on the way to obtaining a CIA.

Certified Public Accountant (CPA)

This designation is the most important among public accountants. The American Institute of Certified Public Accountants (AICPA) awards this certification. To obtain this qualification, a candidate typically needs a bachelor’s degree in accounting and a total of 150 semester hours of coursework.

To obtain this qualification, a candidate typically needs a bachelor’s degree in accounting and a total of 150 semester hours of coursework.

The exact number of class hours varies from state to state. Some professionals choose to take graduate-level courses as part of these requirements. Candidates must also pass a computer-based test to become a CPA.

Related career options

Internal auditing professionals may have advancement opportunities in executive management. These positions typically require a bachelor’s degree plus at least 5 years of business experience. Graduate coursework may increase your chances of getting one of these high-level jobs: