Internal auditors independently verify the internal records of their organization, with an eye toward mismanagement, waste, or fraud. In recent years, internal auditing has gained importance among companies and other organizations. Internal auditors examine their firms’ financial and information systems, management procedures, and internal controls, and then evaluate for accuracy, efficiency, effectiveness, compliance with company policies, and compliance with laws and regulations. They specialize in many different areas, including electronic data-processing, environmental, engineering, legal, insurance premium, bank and healthcare. They are helping managers and executives base their decisions more on real data than on anecdotal evidence and personal observation.
Due to the importance of their work being true and accurate, internal auditors should have a high degree of personal integrity. They must also be good written and verbal communicators because they are constantly required to explain and interpret their work to clients. They need to be able to work with computer systems, including accounting software packages, and they need to be good at working with people. They also should have strong mathematics skills, and an ability to quickly analyze, compare, and interpret facts and figures.
In 2002, internal auditors earned a median annual salary of $47,000. Earnings ranged from the lowest 10%, who earned less than $30,320, and the highest 10%, who earned more than $82,730. The following shows the median annual salaries for the industries employing the highest numbers of internal auditors:
- Accounting, tax prep, bookkeeping, payroll services – $49,520
- Management of companies and enterprises – 49,110
Training and Education
Most candidates for internal auditor positions need to have at least a bachelor’s degree to qualify. Some employers require a master’s degree in business administration with an emphasis in accounting. Experience in the accounting field, such as through a college internship program can be very advantageous for applicants. Another advantage is knowledge of computer accounting applications. Job seekers can gain a unique advantage in the job market by becoming certified as a Certified Public Accountant (CPA). Most States require CPA candidates to have at least 150 college semester hours of accounting, but a few do not. Candidates should carefully research the licensing requirements of the State in which they wish to be certified. However, all States use the same Uniform CPA Examination. The exam is rigorous, consisting of four parts spread over two days of testing. Candidates must usually pass at least two parts, and then pass the remaining parts over a specific period of time. CPAs can specialize even further by obtaining Accredited in Business Valuation (ABV), Certified Information Technology Professional (CITP), or Personal Financial Specialist (PFS) certifications. Internal auditors can become a Certified Internal Auditor (CIA) by passing a four-part exam from the Institute of Internal Auditors, and by having at least 2 years of working experience. Internal auditors have a high degree of occupational mobility and may switch to management accounting. However, it is very uncommon for internal auditors to move into public accounting.
Between 2002 and 2012, the number of internal auditors is expected to increase about as fast as the average. Growth will be due to factors such as an overall increase in the number of businesses, evolving financial laws, the growth of international businesses, and rising scrutiny of company finances. In the wake of recent accounting scandals and an increased awareness of financial crimes, the demand for forensic accountants is expected to rise. Job openings will also result from the need to replace workers who retire, transfer occupations, or leave the labor force for some other reason. The best job prospects will go to those who pursue and obtain CPA status. Those with a master’s degree, or who specialize in areas such as international business, specific industries, or current legislation, will also have a large advantage.