Career Development

What Does an Internal Auditor Do?

Find out what an internal auditor does, how to get this job, and what it takes to succeed as an internal auditor.

Internal auditors are responsible for ensuring that an organization is following best practices and procedures. They commonly focus on financial matters, but they may also examine other areas such as human resources or information technology.

Internal auditors often work with external auditors as well. These third-party auditors provide a fresh set of eyes to look at the internal auditor’s findings and ensure that everything is being handled properly.

Internal Auditor Job Duties

Internal auditors typically have a wide range of responsibilities, which can include:

  • Writing reports summarizing findings and recommendations based on audits, and presenting them to management or other stakeholders
  • Reviewing and analyzing accounting records, journals, ledgers, and other financial records to ensure that they are accurate
  • Preparing detailed audit plans and procedures, including identifying the scope of an audit, determining timing, and selecting resources
  • Conducting interviews with managers and staff members to gather information about operations and activities being audited
  • Reviewing current accounting procedures and recommending improvements to management
  • Performing audits on computer systems to ensure that they are secure from hacking or other unauthorized access
  • Reviewing financial statements for compliance with government regulations or industry standards, such as the Sarbanes-Oxley Act in the United States
  • Establishing controls over financial transactions to prevent fraud or theft
  • Conducting audits of businesses to ensure that they comply with laws and regulations regarding ethics or business practices

Internal Auditor Salary & Outlook

Internal auditors’ salaries vary depending on their level of education, years of experience, and the size and industry of the company. They may also earn additional compensation in the form of bonuses.

  • Median Annual Salary: $82,500 ($39.66/hour)
  • Top 10% Annual Salary: $132,000 ($63.46/hour)

The employment of internal auditors is expected to grow at an average rate over the next decade.

Organizations will continue to hire internal auditors to ensure compliance with regulations and to improve efficiency and effectiveness. However, the growth rate for internal auditors may be limited because some organizations are outsourcing audit functions to reduce costs.

Internal Auditor Job Requirements

Internal auditors typically need to have the following qualifications:

Education: Most employers require internal auditors to have a bachelor’s degree in accounting, finance or another closely related field. Some employers prefer candidates who have a master’s degree in accounting or business administration with a concentration in accounting. Relevant coursework includes financial accounting, auditing, taxation, business law and business communication.

Training & Experience: Internal auditors typically receive on-the-job training in the form of mentorship from senior-level auditors or managers. This training allows the internal auditor to learn the specific processes and procedures of the company. It also allows the internal auditor to learn the specific software and computer systems the company uses.

Certifications & Licenses: Certifications can offer internal auditors an advantage in the job market since they show professional competence and dedication. There are several different certifications available for internal auditors to help them expand their knowledge and improve their chances of being hired by an employer.

Internal Auditor Skills

Internal auditors need the following skills in order to be successful:

Communication skills: Effective internal auditors communicate with a variety of stakeholders, including other auditors, managers, employees and clients. They must be able to explain complex financial information in a way that everyone can understand. They also need to be able to communicate effectively with employees to ensure they understand the expectations of the audit.

Critical thinking and problem-solving skills: Critical thinking and problem-solving skills are necessary for effective internal auditing. You may be called upon to investigate and provide solutions to a variety of issues, including financial discrepancies, employee misconduct and other challenges. Your ability to identify the source of the problem, develop a plan of action and implement solutions is an important skill for an internal auditor.

Attention to detail: Attention to detail is the ability to notice small changes in data or documents. As an internal auditor, you may be responsible for reviewing large amounts of data, so attention to detail can help you notice any irregularities or inconsistencies. This can help you identify potential risks and vulnerabilities in your organization’s processes.

Knowledge of auditing standards: Standards are regulations that dictate how companies should keep records and report their financial information. Having knowledge of auditing standards can help you ensure that you’re following the rules and regulations of your company. It can also help you identify any irregularities in your company’s records.

Ability to work independently: Independent work is a necessary skill for internal auditors, as they often work alone to complete their duties. This includes researching and analyzing data, preparing reports and presenting their findings to management. Being able to work independently can help you complete your duties efficiently and effectively.

Internal Auditor Work Environment

Internal auditors work in a variety of settings, including corporate offices, manufacturing plants, and retail stores. They typically work a regular 40-hour week, although they may occasionally work overtime to complete special projects or to meet deadlines. Internal auditors typically work independently, although they may consult with other auditors, managers, and employees while conducting their audits. They must be able to pay close attention to detail and have excellent analytical and communication skills.

Internal Auditor Trends

Here are three trends influencing how internal auditors work. Internal auditors will need to stay up-to-date on these developments to keep their skills relevant and maintain a competitive advantage in the workplace.

The Role of the Internal Auditor Will Become More Strategic

The role of the internal auditor is evolving, as they are increasingly being asked to play a more strategic role within their organizations.

Internal auditors can now expect to be involved in a wider range of activities, such as risk management and compliance monitoring. In addition, they will need to be able to communicate effectively with other members of the executive team in order to provide them with the information they need to make informed decisions.

More Focus on Cybersecurity

As businesses become more reliant on technology, the need for internal auditors who specialize in cybersecurity will continue to grow.

Internal auditors can utilize their expertise to help businesses protect themselves from cyberattacks by identifying vulnerabilities and developing strategies to mitigate them. They can also help to educate employees about how to stay safe online.

Greater Attention to Risk Management

Risk management has become an increasingly important focus for businesses in recent years. This is due to the fact that many businesses have suffered significant losses as a result of poor risk management practices.

As internal auditors are responsible for assessing the risks that a business faces, they are in a unique position to help businesses manage these risks. By doing so, they can help to ensure that businesses are prepared for any potential disasters that may be lurking around the corner.

How to Become an Internal Auditor

A career as an internal auditor can be very rewarding. It offers the opportunity to work in a variety of industries and with different types of organizations. You’ll also have the chance to make a real difference by helping companies improve their operations and reduce waste, fraud, and abuse.

To be successful in this field, you need to have strong analytical skills, be able to think critically, and be able to see things from multiple perspectives. You should also be able to communicate effectively both orally and in writing.

Advancement Prospects

Internal auditors typically start their careers in entry-level positions and are promoted to higher-level positions as they gain experience. Many internal auditors eventually become chief audit executives or partners in accounting firms.

Some internal auditors move into related positions in finance or management. Others may become certified public accountants or certified fraud examiners. Some open their own accounting or consulting firms.

Internal Auditor Job Description Example

As an internal auditor at [CompanyX], you will play a vital role in our organization by providing independent, objective assurance and consulting services designed to add value and improve our operations. You will work closely with management to help them accomplish their objectives by providing insights and recommendations on risks, controls, and governance processes. The successful candidate will have a strong understanding of auditing standards and procedures, as well as experience with data analysis and report writing. He or she will be a critical thinker with the ability to think outside the box to identify risks and potential solutions.

Duties & Responsibilities

  • Understand the organization’s business model, strategy, and objectives
  • Assess risks to the achievement of the organization’s business objectives
  • Develop a risk-based audit plan that covers all areas of the organization’s operations
  • Conduct audits in accordance with professional standards
  • Communicate audit findings and recommendations to management
  • Follow up on management’s implementation of audit recommendations
  • Prepare reports for the Audit Committee and Board of Directors
  • Maintain confidentiality of information and protect the organization’s interests
  • Comply with all laws, regulations, and policies applicable to the organization
  • Foster a culture of ethics and integrity within the organization
  • Promote the profession of internal auditing within the organization
  • Serve as a resource to the organization on matters related to risk management and control

Required Skills and Qualifications

  • Bachelor’s degree in accounting or related field
  • CPA or CIA designation preferred
  • 5+ years experience in public accounting or internal auditing
  • Strong understanding of GAAP, SOX, and IIA standards
  • Excellent analytical, research, and writing skills
  • Proven ability to work independently and with a team

Preferred Skills and Qualifications

  • MBA or Master’s degree in accounting or related field
  • Experience leading and managing audit teams
  • Experience with data analysis software, including ACL and IDEA
  • Familiarity with ERP systems, SAP preferred
  • Industry-specific knowledge and experience

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