by Scott Fargason, JD, CPA, CIA, CFE; Alicia Rieffel, MS, CPA; and
Glenn E. Sumners, DBA, CPA, CFE
Are you looking for a challenging entry-level position that provides a
good overview of an organization and serves as a stepping-stone to management
positions? Internal auditing provides these opportunities and more.
Internal auditing is the entry-level position of choice for many undergraduate
and graduate students from both business and non-business disciplines.
The current job market is outstanding and the future looks very promising
for the profession. The demand for internal auditors to serve as internal
consultants is unparalleled. The profession offers challenging assignments
and excellent career opportunities with competitive compensation.
Internal auditing is an independent appraisal function established within
an organization to examine and evaluate the adequacy and effectiveness
of the organization's internal control system and its overall quality
of performance. Internal auditors furnish top management with analyses,
appraisals, recommendations, counsel, and information concerning the activities
of the organization
The Internal Auditing Profession
The practice of internal auditing has been in existence for more than
one hundred years. However, internal auditing is a relatively new and
emerging profession. The Institute of Internal Auditors (IIA) was founded
in 1941 and is the recognized body that governs the practice of internal
auditing. The IIA headquarters is located in Altamonte Springs, Florida,
and the profession currently has a membership of over 66,000 internal
auditors from over 125 countries. The IIA works in conjunction with many
local chapters throughout the world in order to promote the profession.
Types Of Audits
Internal auditors not only test the accuracy of financial reporting, they
also review the operations of organizations in order to determine the
efficiency and effectiveness of the organization under review and to determine
whether the organization is in compliance with established laws and organization
policies. Internal auditors help executive management assess controls
within the organization with the overall goal of increasing profitability.
Audits are generally classified as financial, compliance, or operational
Financial auditing is the analysis of the economic activity of an organization
as measured and reported by its financial statements. Financial audits
test the validity of the financial statements.
Reviewing both financial and operating controls determines how well the
organization conforms with its established policies and procedures, rules
and regulations, or laws. An example of a compliance audit would be the
verification that the organization is in compliance with federal regulations
such as those of the Environmental Protection Agency.
Auditors perform comprehensive reviews of activities, systems, and controls
to evaluate economic, efficient, and effective processes within an organization.
A primary purpose of an operational audit is to measure management's performance
in meeting organizational goals at minimal cost. In this regard, operational
auditing is a consulting service to management. The internal auditor of
the twenty-first century will place more emphasis on offering such consulting
services to the organization. For many organizations, internal auditors
already provide a vast array of consulting services, in an effort to enhance
efficiency and effectiveness of the organization.
Internal Auditing---Career Path or Stepping Stone?
In many organizations, the internal auditing department provides excellent
training for future management positions. Internal auditors' work includes
a wide array of assignments at various locations and provides a good overview
of the entire organization. Internal auditors form a "big picture"
mentality that is needed in management positions. The benefits of conducting
audits include the broad exposure to different business processes, while
having the opportunity to review related internal controls and operational
practices. In this regard, the internal auditing department is a "stepping
stone" for many internal auditors who eventually move into executive
management. Typically a new hire will work for three years as an internal
auditor and then rotate into another department within the organization,
bringing the knowledge, skills, and discipline of the internal auditing
profession to the new position. On the other hand, some individuals prefer
to make internal auditing a career. Many enjoy the variety of challenges
and travel opportunities that the profession has to offer.
What Organizations Hire Internal Auditors?
Organizations of virtually all shapes and sizes employ internal auditors.
Major corporations typically have large audit staffs (25-250). In addition,
many small organizations hire internal auditors to help review and improve
operations. Regardless of size, the internal audit department can provide
valuable information to executive management by examining current practices
of the company, noting deficiencies, and making corresponding recommendations
for corrective action. The internal auditing profession spans the globe.
You will find internal auditors in almost every country, conducting audits
for private companies, public corporations, and not-for-profit organizations.
For many internal auditors, their job is 100% travel, affording the internal
auditor an opportunity to "see the world." However, the typical
auditor travels 30% of the time depending on whether the organization
is multi-locational or international.
Skills And Attributes Of Internal Auditors
Internal auditing is a multidisciplinary profession requiring that auditors
have a wide variety of skills. However, a few attributes are paramount.
The majority of audit time is spent working with people. Accordingly,
internal auditors must possess good oral and written communication skills
to persuade management that change is needed to address risks, improve
controls, and more efficiently and effectively achieve goals and objectives.
Internal auditors spend most of their time communicating with their "customers"
throughout the organization. The audit process typically includes interviews
with management and operating personnel. The audit team prepares a report
at the conclusion of each audit that provides constructive recommendations
to assist its customers in their assigned management roles.
Unstructured Problem Solving
Internal auditors are assigned to a wide variety and types of audits throughout
the organization. The increasing emphasis on consulting, value-added auditing,
and operational auditing requires skills to solve unstructured problems.
Business is changing at an unparalleled rate due to technology, competition,
and globalization. This turbulent environment creates a need for auditors
that can identify risks, evaluate controls, and serve as a catalyst to
Most audit assignments are complex and require a variety of skills and
knowledge. Accordingly, auditors work in teams that collectively possess
the required skill sets. Internal auditors must have the demeanor, disposition,
and interpersonal skills to function on an integrated audit team.
An increasingly emerging skill for internal auditors is information systems
knowledge, including computer technology. Information systems is an integral
part of most business processes and auditors must be able to understand,
evaluate, and suggest changes to improve systems.
What Is A Certified Internal Auditor (CIA)?
CIAs are a select group of professionals who have distinguished themselves
in one of the world's most rewarding career fields---internal auditing.
The CIA designation demonstrates competence in the principles and practice
of internal auditing and is the designation accepted internationally for
Why Should You Become a CIA?
Preparing for the exam will sharpen your skills as an internal auditor.
As a CIA you will receive personal satisfaction in achieving a challenging
goal and you will be recognized as an expert in the field of internal
auditing, considered for more career opportunities or promotions, and
included as a distinguished member of a select group of internal auditing
Certification is definitely an attainable goal for an internal auditor
with a serious commitment and good study habits. The test lasts two days
and consists of four parts, each three and one-half hours long. It evaluates
the candidate in all areas of study necessary to perform the role of an
internal auditor. A brief overview of the exam is presented since the
exam reflects the knowledge base of internal auditors.
Part I---Internal Audit Process
Part I focuses on the theory and practice of internal auditing. Major
areas covered include auditing, professionalism, and fraud (detection,
reporting, and investigating.)
Part II---Internal Audit Skills
Part II includes the application of problem solving, decision-making techniques,
and reasoning skills in an audit context. This part includes specific
skill emphasis on problem-solving and reasoning ability, communication
skills, and dealing with auditees. Problem-solving skills are tested at
various levels of competency. Behavioral skills, statistics, and mathematical
skills are tested at the understanding and awareness levels.
Part III---Management Control and Information Technology
Part III deals with basic business disciplines essential to the practice
of internal auditing. The major topic areas covered are organization and
management, information technology, managerial accounting, and quantitative
methods as a management tool.
Part IV---The Audit Environment
Part IV covers areas such as financial accounting, finance, economics,
international developments relevant to the practice of internal auditing,
government, taxes, and marketing.
How Can You Prepare For An Internal Audit Career?
Internal auditors have a variety of educational backgrounds. However,
a business degree is perhaps the most common. A business degree combined
with communication and systems courses is one path that could prepare
you for an internal audit position.
For Additional Information:
Students interested in a career in internal auditing should contact one
of the IIA's Endorsed Internal Audit programs at the following schools:
University of Alabama at Birmingham; Arizona State University; West Bentley
College; Boise State University; Brigham Young University; California
State University, Dominguez Hills; Clemson University; Cleveland State
University; Eastern Michigan University; Florida Atlantic University;
Florida International University; Howard University; University of Houston;
King Fahd University of Petroleum and Minerals; Louisiana State University;
University of New Orleans; New York University; University of North Carolina
at Charlotte; University of North Texas Norwegian School of Management;
Old Dominion University; San Francisco State University; Seton Hall University;
Southwest Missouri State University; State University of New York (SUNY)
at Buffalo; University of Tennessee at Knoxville; Tennessee Technological
University; Texas A & M University; University of Texas at Arlington;
University of Texas at Austin; and University of Aiz-Marseille III Grad.
School of Bus.
The IIA Manager of Academic Relations (at the address below) can also
Manager of Academic Relations at The Institute of Internal Auditors
249 Maitland Avenue, Altamonte Springs, FL 32701
Most major cities have an IIA Chapter.
The motto of the profession is "Progress through sharing" and
members are receptive to your questions and will gladly discuss their
profession with you.
For additional information about The Institute of Internal Auditors, contact
the Customer Service Center at e-mail email@example.com, or fax (407)831-5171,
or telephone (407)830-7600 ext. 1.
Additional information is available at the following web sites.
The Institute of Internal Auditors---http://theiia.org
LSU Center for Internal Auditors--0-http://www.bus.lsu.edu/accounting/
The internal audit profession provides an excellent opportunity for students
who excel in their academic studies and have good interpersonal skills.
Internal auditing can provide you with the training and opportunity to
kick-start your career. Internal auditors spend most of their time working
with management to improve the efficiency, effectiveness, and economy
of operations. The ability to pro-actively work with people to facilitate
change is an essential attribute.
Louisiana State University
Center for Internal Auditing
Dr. Glenn Sumners is the Director of the Center for Internal Audit at
Louisiana State University.
Scott Fargason and Alicia Rieffel are instructors at Louisiana State University.