Who Is An Internal Auditor And What Do They Do- An internal auditor is an employee of an organization that is charged with the responsibility of ensuring that the organization have accurate accounting all through the year. He/ She acts like an internal policeman watching and investigating to detect any fraud or malicious activity that may be harmful to the company . In this post, we would discuss in great detail who an internal auditor is, how they carry out their role and what you need to become one.
Who Is An Internal Auditor
An internal auditor play very crucial role in the success and integrity of a business/ enterprise. It is a very sensitive job role in an organization, which makes the job a high paying one. He/She serves as a secret police watching and monitoring every activity (most especially the financial ones) going on in a company. It is the duty of internal auditor to detect and report fraudulent activities.
They work independently in a company acting as an impartial judge of company’s activities/ behaviours. They play a major role of providing risk management support and ensuring optimum efficiency . These they do by identifying non-compliance, sources of waste and minimizing such.
Majorly, internal auditors deal with financial aspect of a company but they may also get involved in some other aspect of an organization such as operational efficiency, information technology system, employee review process , legal liability, etc.
They sit down to study company’s policies and then compare them with the actual daily business activities . They point out non-compliance and suggest ways to improve methods that will align with company’s goals.
What Does An Internal Auditor Do
Analysis of business operations
He/she review regularly the company’s operations to ensure that they are rightly implemented to achieve set goals and objectives. They also ascertain that business assets are being adequately and correctly.
Monitor and review compliance
They always stay informed of current regulations and legislation. They make the company understand the consequence of non-compliance and also report cases of non-compliance to senior managers.
Other Roles Of In Internal Auditing
- Identify financial risk of a business and recommend ways to minimize such risk.
- Evaluation of financial documents of the company for accuracy and compliance with key regulations.
- Find out ways to reduce operational costs and improve profitability
- Identify ways in which accounting and financial record keeping processes can be improved.
- Assessment of the effectiveness and productivity of the staffs of the company and make suggestions on how improvement can be made
- Out of the findings and investigations made, present reports to the top management
- They investigate fraud
- Evaluate internal controls and recommend how to improve on them.
- They promote work ethics and point out improper conduct
Necessary Certifications Required Of An Internal Auditor
- Certified Internal Auditor (CIA) : managed by the Institute of internal auditors(CIA)
- Certified Information Systems Audit (CISA) governed by the Information systems audit and control Association ( ISACA)
- Certification in Risk Management Assurance (CRMA)
- Certified Government Auditing professional (CGAP)
- Certified Process Safety Auditor (CPSA)
Why You Need An Internal Auditor On Your Team
If you run a business organization that is on the progressive, then you should hire an internal auditor for the following reasons:
- For better growth of the company
- For more effective results
- To ensure compliance
- To identify fraudulent activities
- For reduced operational cost and greater profitability
- Saves you time , money and unnecessary pressure when external auditors shows up in your company
What Is The Difference Between An Internal Auditor And An External Auditor
An internal auditor is usually employed within a company where he/she carries out auditing activities while an external auditor is an accountant who carry out audits, reviews , etc. He/She works independently of all clients
Internal auditing focus more on checking to see if business operations are going on as they should while external auditing focus more on checking if the financial statements are correctly stated.
Internal audit is an optional role in an organization while external audit is mandatory.
Skills Needed In Internal Auditing
Excellent communication skills
This is needed on the role, as you will be interacting with accountants , co-workers and the management. You will also be writing reports.
Great attention to details
You will be dealing with a lot of data and numbers as an internal auditors. So you must be very meticulous even with the smallest details.
Excellent mathematical skills
Your job roles will involve you dealing with a lot of numbers and data. So you must be sound at basic mathematical operations.
Good critical thinking skills
You will need this skill in your job role as internal auditor. After gathering data, you will be needing to make inference and take decisions .
High proficiency in accounting software and spreadsheets
You will need this this carrying this skill in carrying out your auditing activities.
Great research skills
As an internal auditor, you will need to carry out investigation to detect frauds, etc.
How To Become An Internal Auditor
- Get a bachelor’s degree in accounting or related field. A master’s degree will be an added advantage
- Get necessary certifications
- Get experience: experience in internship or entry level role is usually required . Experience in business administration, finance or accounting may also be useful.
- Other skills needed: good organizational skills, ability to work under pressure, ability to meet deadlines.
Although, it is not really mandatory to have the role of an internal auditor, however, it is advisable . An internal auditor serves as the eyes and ears of the company , monitoring business operations , ensuring compliance and detecting frauds.
Frequently Asked Questions
What are the types of audit?
There are three major types of audit: external audit, internal audit and internal revenue service audits
Who employs external auditors?
External auditors are been hired by the shareholders of a company
What is the role of an internal auditor?
An internal auditor ensure that business operations of a company is in compliance with company’s policies and standards and are risk-management compliant too.
What skills must an internal auditor possess?
- Problem solving skills
- Risk management skills
- Data analytics
- Product knowledge
- Experience in accounting
Who does an internal audit report to?
An internal auditor reports directly to the audit committee and other designated team to be decided by the company.
Is it compulsory to have an internal audit activity?
Having an internal audit unit or not all depends on the regulatory requirements governing the organization.
- www. linfordco. com- What is an Internal Auditor and why should you hire one
- www. onlinedegrees. und. edu – What does an internal auditor do?
- www. indeed. com- Internal Auditor Job description, top duties and qualification
- www. accountingtools. com- External Auditor definition
- www. tenaix. com- Internal auditor qualificationa job, audit, finance and management jobs