Certification and Licensure Needed by an Internal Auditor

Having a certification demonstrates that a person has the necessary expertise and knowledge about the field that they are working in.

For internal auditors also the same is the case and for better advancement in their career they have to look towards a viable credential.

• An internal auditor can pursue Certified Public Accountant (CPA) credential of the American Institute of the Certified Public Accountants (AICPA) as this is the most sought after credential by employers.
• In recent times the certification which demonstrates knowledge and experience in internal auditing is the Certified Internal Auditor (CIA) credential from the Institute of Internal Auditors.
• This credential is gaining more acceptance as CPAs are proficient from the financial and accounting side of the business, whereas CIAs get a more rounded education.

Skills and Abilities needed for an internal auditor?

• Must have strong analytical and problem solving skills.
• Must be very good in mathematics.
• Their communication skills, both verbal and written should be very strong as they have to interact not only with the staff of other departments but also the upper management.
• They should have good knowledge of computers and the software needed for the job.
• Must be detailed oriented, observant and must be sensitive to deal with delicate issues and information.

Must have good interpersonal skills, organizational skills and multi-

Duties and Responsibilities for Internal Auditors

The scope for an internal auditor is varied.

His duties and responsibilities take on the shape of specialty that he has been educated in e.g. information technology auditor, environmental auditor and compliance auditor.

It also depends on the industry that he works in and the organization or employer type that he works for.

Given below are the broad duties and responsibilities of an internal auditor.

§  To plan and organise the operational, financial, security and information technologies audit programs and take necessary steps to promote effective audit coverage.

§  Programs, policies and activities of the department are to be reported both to the management and audit committee.

§  Design or assist in the designing of computer software for audit program routines to analyze computer systems databases and perform data mining and analysis to evaluate the efficiency and effectiveness of system controls.

§  These analysis to gauge the effectiveness and efficiency of operational and management processes and system controls are taken up with the intention of improving them and giving value added recommendations.

§  Perform financial, security, management and information technologies audit programs in accordance with the yearly audit plans in all areas of the organization.

§  If it is a big organization having various branches then the internal audit team has to perform field work at all its locations.

§  Innovate and participate in the development of new information systems for efficient and effective controls.

§  Present to the management the results, conclusions and recommendation of audit reviews.

§  Maintain cordial, respectful and effective communication and relationship with the management as well as with the staff of areas under review.

§  Prepare draft audit reports.

§  As per the recommendation and request of the external auditors review the year-end inventory balances.

§  To see that compliance of all the rules and regulations of the organization as well as laws laid down by the local, state and federal government have been followed.

§  Take part in management approved programs for continuing education to remain up-to-date with the audit profession.

Educational background of an internal auditor

§  Mostly all employers favour candidates who have bachelors or master’s degree in accounting or business administration with a concentration in accounting when employing someone as an internal auditor.

§  Some universities and colleges offer programs that will help students to work in specialty professions such as internal auditing.

About Internal Auditors

An internal auditor works in the audit department of a company or corporation and carries out an independent appraisal of how the financial, physical and information sources are being handled with regards to the policies, procedures and standards laid down by the company. However internal auditors do not implement the company’s activities, they rather advise executives and Board of Directors or the Audit Committee on how to better accomplish their responsibilities.

On the basis of their analysis and assessments of data and the business, internal auditors aim to improve the corporation’s effectiveness and efficiency and accomplish its purpose by bringing a disciplined, systematic approach to the assessment and develop the effectiveness of risk management, governance and control of the procedures. They are an objective source of independent advice to the senior management and governing bodies.

Internal auditors have a wide scope to report about and could include topics such as how efficiently the business is currently operating, how reliable are the financial reports, not only to investigate but also deter fraud from being committed, safeguarding the assets by auditing the assets register and also physical verification and seeing that all the laws and regulations are complied with. Given this broad scope of involvement it is required that internal auditors have a variety of higher educational and professional backgrounds.

How much is the remuneration of an internal auditor?

An internal auditor is a qualified professional and his salary is commensurate with his qualifications.

The number of years of experience, the industry that they work in, the type of employer who employs him as well as the city that he works in, are the factors which influence the amount of salary or hourly wage that they get.

Some of the factors that influence salary have been enumerated below.

• Years of Experience

§  Experience of less than one year the salary range is between $ 30,100 and $ 52,335 and the hourly wage range is between $ 10.47 and $ 20.42.

§  Experience between one to four years the salary range is between $ 35,463 and $ 63,313 and the hourly wage range is between $ 10.75 and $ 25.58.

§  Experience between five to nine years the salary range is between $ 41,006 and $ 80,467 and an hourly wage range is between $ 11.91 and $ 22.19.

§  Experience between ten to nineteen years the salary range is between $ 38,347 and $ 82,251 and an hourly wage range is between $ 12.42 and $ 32.00.

§  Experience of more than twenty years the salary range is between $ 37,257 and $ 92,542 and an hourly wage range is between $ 14.20 and $ 26.63.

• Industry

§  An internal auditor working in banking gets an annual salary range between $ 30,989 and $ 59,965 and an hourly wage rate between $ 11.15and $ 20.81.

§  An internal auditor working in financial services gets an annual salary range between $ 35,229 and $ 68,641 and an hourly wage rate between $ 11.63 and $ 25.21.

§  An internal auditor working in accounting or auditing firm gets an annual salary range between $40,731 and $ 70,443.

§  An internal auditor working in healthcare gets an annual salary range between $ 41,437 and $ 62,870.

§  An internal auditor working in insurance gets an annual salary range between $ 39,755 and $ 75,167.

§  An internal auditor working in government gets an annual salary range between $ 38,144 and $ 75,866.

§  An internal auditor working in manufacturing and distribution gets an annual salary range between $ 39,319 and $ 78,219.

• Employer Type

§  An internal auditor working for a company gets an annual salary range between $ 36,649 and $ 69,576 and an hourly wage rate between $ 10.82 and $ 24.11.

§  An internal auditor working for a government – state and local gets an annual salary range between $ 37,933 and $ 71,887 and an hourly wage rate between $ 19.00 and $ 25.82.

§  An internal auditor working for other organization gets an annual salary range between $ 34,203 and $ 60,077 and an hourly wage rate between $ 11.34 and $ 24.19.

§  An internal auditor working for a non profit organization gets an annual salary range between $ 33,202 and $ 63,109 and an hourly wage rate between $ 9.19 and $ 26.40.

§  An internal auditor working for a private practice or firm gets an annual salary range between $ 37,271 and $ 70,050 and an hourly wage rate between $ 12.63 and $ 22.03.

§  An internal auditor working for a government – federal gets an annual salary range between $ 33,554 and $ 86,840.

§  An internal auditor working for a hospital gets an annual salary range between $ 39,938 and $ 66,188 and an hourly wage rate between $ 14.58 and $ 28.07.

§  An internal auditor working for a college or university gets an annual salary range between $ 36,241 and $ 65,889.

§  An internal auditor working for a school or school district gets an annual salary range between $ 38,000 and $ 69,751.

§  An internal auditor working for a foundation or trust gets an annual salary range between $ 31,538 and $ 50,263.

§  An internal auditor working for a contract gets an annual salary range between $ 45,201 and $ 64,094.

§  An internal auditor who is self-employed gets an annual salary range between $ 26,000 and $ 55,500.

• City

§  An internal auditor working in New York, New York gets an annual salary range between $ 43,850 and $ 89,743 and an hourly wage rate between $ 16.70 and $ 20.35.

§  An internal auditor working in Houston, Texas gets an annual salary range between $ 43,574 and $ 72,762 and an hourly wage rate between $ 14.00 and $ 25.54.

§  An internal auditor working in Dallas, Texas gets an annual salary range between $ 39,151 and $ 72,352 and an hourly wage rate between $ 10.48 and $ 20.00.

§  An internal auditor working in Chicago, Illinois gets an annual salary range between $ 41,773 and $ 68,912.

§  An internal auditor working in St. Louis, Missouri gets an annual salary range between $ 38,234 and $ 62,736.

§  An internal auditor working in Boston, Massachusetts gets an annual salary range between $ 44,698 and $ 67,154.

§  An internal auditor working in Atlanta, Georgia gets an annual salary range between $ 36,752 and $ 66,946.

There is not much difference in the female to male ratio working in this profession.

The percentile of females working is 53% and the average salary that they receive is between the range of $ 40,758 and $ 57,607.

Their male counterpart in this profession works out to 43% and their average annual salary is between the range of $ 42,005 and $ 58,582.

Internal auditors receive the common health benefits such as medical, dental and for vision.

89% of internal auditors said that they receive medical benefits, 79% said that they receive dental benefits while 64% said that they receive benefits towards expenses for vision and only 9% said that they did not receive any health benefits.

Other than these they receive the other regular benefits such as 401(k), paid sick leave, paid vacation/holiday time, life insurance/disability and reimbursement towards education, training, tuition and certification.