What's it Take to be an Internal Auditor?A Look at Skill Sets and Career Options Given the increased external scrutiny of banking institutions, what are the requisite skills and responsibilities for internal auditors?
"Up to now the internal auditors and the audit committee at banks have been mainly concerned with what the regulators and examiners have to say, and their prime focus has been on list-checking," says Holly Daniels, Technical Director at the Institute of Internal Auditors (IIA), who has worked extensively with banks and financial institutions.
Going forward, Daniels says, "Internal auditors need to get a proper seat at the management table and have the management's ear to proceed forward to let institutions and companies know that they are there to help."
Daniels and the IIA help answer some key questions about the role and potential career path of the internal auditor:
What is Internal Auditing? Internal Auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.
What are the requisite skills to be an internal auditor?
A broad range of skills, expertise and ongoing professional development are critical to the success of an effective internal auditor. Essential elements include in-depth knowledge of the organization's industry, best practices, as well as the formal International Standards for the Professional Practice of Internal Auditing; technical understanding and expertise; skills for implementing and improving processes in both financial and operational areas; strong communication and presentation skills, and professional certification, such as the Certified Internal Auditor (CIA).
Today's internal auditors must provide to their audit committees explicit assurance on organizational governance, as well as meet ever-increasing demands of management and other stakeholders. They must excel as internal control and risk management experts to ensure the controls over key systems and business processes are robust and effective.
Increasingly internal audit activities are performed by multi-disciplinary teams that include engineers, accountants, management graduates and even environmental specialists who reflect a broad range of today s assurance needs. Also, information technology audit experts are a core component of modern-day internal audit activities.
Control self-assessment, facilitation and risk and internal-control training are increasingly falling under the purview of internal auditors. As such, to be their most effective, they must demonstrate:
What is a typical career path for an internal auditor?
An entry-level internal auditor might spend less than one year in that role before progressing into subsequent positions, including: Audit Senior Supervisor;
Internal auditing can be a lifelong banking career. However, many people move out of internal auditing and into other areas of the organization such as compliance, risk management, operations management or finance. Many even go on to become Chief Financial Officers and Chief Executive Officers of organizations.
Because internal auditing provides its staff exposure to many different areas of an organization and understanding of the business and its risks, many institutions use their internal audit department as a training ground for new managers, systematically rotating them through the various positions within the department before moving them into a field management position.