How to become an internal auditor
Aug 24, 2021 - Finding the right job
Auditors are always in high demand and benefit from an active jobs market.
Sometimes an organisation or business becomes too big for all financial control to be entrusted in the hands of one person.
The Chief Financial Officer (CFO) has a busy inbox. The CFO directs a company's financial goals, objectives, and budgets, oversees the investment of funds held by the company, manages risks and heads up the accounting functions. It’s a lot to cover and too much reliance on one person can expose a business to unnecessary risk.
So who checks the work of the CFO? The Chief Executive is far too busy with the task of running the business. Step forward to the internal auditor.
Why are internal auditors needed?
According to the Chartered Institute of Internal Auditors (IIA), the role of an internal audit is to provide independent assurance that an organisation's risk management, governance and internal control processes are operating effectively.
Although employed by the business, internal auditors maintain strict impartiality and have a professional duty to provide an unbiased and objective view.
Although impartial, internal auditors play an important role in helping organisations to succeed.
They examine an organisation’s finances, policies and procedures to advise where improvements can be made. They provide independent guarantees that an organisation's risk management, governance and control processes are operating effectively.
Auditors verify the work of the accountants. They examine the financial statements and ensure they are an accurate representation of the company's financial position.
Without internal auditors, a business is at risk of being non-compliant, inefficient and lacking in direction.
Do internal auditors just check financial statements?
Although this is the fundamental role, their remit is usually far wider.
In addition to assessing financial and accounting risks, the auditors can be charged with examining a business’s environmental impact, employee engagement, processes and procedures, growth plans and ethics.
More than just spreadsheet checkers, internal auditors often act as holistic business advisors.
Who do internal auditors report to?
With their expertise in accountancy and finance, it might be assumed that internal auditors would report to the CFO. However, this could be a threat to the impartiality of auditors. It is not ideal to be checking the work of the boss!
The IIA note that auditors should have a clear reporting structure, which should be “Independent from the operations we evaluate and [we should] report to the highest level in an organisation: senior managers and governors. Typically this is the board of directors or the board of trustees, the accounting officer or the audit committee.”
In assessing the quality of risk management processes, systems of internal control and corporate governance processes, there should be a direct route to the most senior level of executive management and the board’s audit committee.
What does an internal auditor earn?
According to graduate careers advisors, Prospects, and internal auditors with one to three years' experience can expect to earn salaries of £22,000 to £35,000.
With three to seven years' experience salary levels range from £32,000 to £53,000.
Experienced managers or directors, should be expecting salaries over £70,000.
This, of course, is just a rough guide. If you contact me, I can find advise you on what level of salary you should be looking for and the audit jobs which are currently available
How to become an internal auditor
Access to an auditing career path is largely reserved for graduates, with chances increasing if the degree is relevant - eg. in accountancy, economics, finance or IT.
However, there are pathways to aiding without going to university. The IIA has designed apprenticeships for those interested in a career in the audit:
- Internal audit practitioner - (Level 4 apprenticeship). Internal audit practitioners going through this apprenticeship are typical: newly appointed to an internal audit role and involved in undertaking all aspects of internal audit engagements, or existing internal audit staff who’d like to improve their knowledge and understanding of internal audit.
- Internal audit professional - (Level 7 apprenticeship). This is designed for people who have built up experience in internal auditing, risk management, governance or control.
What is the career path for an internal auditor?
The great news is that there is always a constant demand for internal auditors. The ever-changing compliance demands on large businesses have to be met. Technologies and processes are forever advancing. And then there are permanent challenges such as preventing and fighting fraud.
So where will a career take you? Within a company, the all-around knowledge and strategic insights you gain will make you an invaluable asset, and there can be great opportunities at a managerial or director level.
For many, the path leads from being a junior member of an audit team to leading a team and then progressing to larger organisations. The demands of global, multinational businesses are very different from those of an SME. As experience grows, so does the size of the business you can work for.
Claire Jones is the Principal Consultant in the Accountancy Division at Harvey John.
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