Is Internal Audit A Good Career Path? A Complete Gui

Is internal audit a good career path? Internal auditors who prove their skills and knowledge can move up in organizations.

Additionally, an internal audit offers a good work/life balance. And it allows working in a variety of industries.

Is Internal Audit A Good Career Path?

With the rise in corporate governance, the role of internal auditors has become more important than ever before.

So the importance of internal audits has increased. It, in turn, has made it a desirable career choice for many people.

Let’s find out more about internal audit as a career.

What Is Internal Audit?

Internal audit is the process of evaluating an organization’s financial and operational practices.

Usually, the purpose of an internal audit is to ensure that the organization is following best practices.

It can also help to identify areas where the organization can improve.

How Much Do Internal Auditors Make?

Internal auditors generally make more than most other professionals. The median salary for an internal auditor is $67288 per year. Their top 10% make up to $112,000 per year. (Glassdoor)

Some organizations may offer bonuses and other perks on top of the base salary.

Types Of Internal Audits:

There are two main types of internal audits: financial and operational.

1. Financial Audits:

As the name suggests, financial audits focus on an organization’s financial statements.

With a financial audit, an internal auditor will examine an organization’s transactions.

They will ensure that they are accurate and in compliance with laws and regulations.

Some of the things that a financial auditor may examine include:

– Financial statements

– Accounting records

– Cash flow

– Investments

2. Operational Audits:

On the other hand, operational audits focus on an organization’s operations. This type of audit examines how well an organization is run.

It looks at efficiency, effectiveness, and compliance with policies and procedures.

Some of the things that an operational auditor may examine include:

– Management processes

– Information systems

– Compliance with laws and regulations

What Are The Major Responsibilities Of Internal Auditors?

The responsibilities of internal auditors vary depending on the organization. However, there are some common responsibilities that all internal auditors share.

These include:

1. Evaluating Effectiveness Of Internal Controls:

Regarding financial and operational practices, internal controls create an effective system.

Internal controls can be procedures, policies, or any other type of measure. They safeguard the organization’s assets and interests.

An internal audit’s role is to evaluate these controls’ effectiveness. This includes testing the controls to see if they work as they should.

And when internal controls are not effective, an internal audit recommends improvements.

2. Identifying Risks And Assessing Their Impact:

All organizations face risks. These can be financial risks, operational risks, or compliance risks.

The internal audit’s role is to identify these risks and assess their impact on the organization.

This helps management make informed decisions about how to allocate resources.

With the ever-changing business environment, new risks are always emerging. So internal audits need to keep up-to-date on the latest risks.

3. Recommending Changes To Improve The Effectiveness Of Internal Controls:

The internal audit’s role is to evaluate the effectiveness of internal controls.

When internal audit finds that controls are ineffective, they recommend changes.

They work to improve the design of controls. And they make recommendations on how they should be implemented.

With the right changes, internal controls can be more effective in mitigating risks.

4. Monitoring Compliance With Laws And Regulations:

Organizations must comply with many laws and regulations. These include laws on financial reporting, taxes, anti-corruption, and environmental regulations.

Internal audit monitors compliance with these laws and regulations. This helps organizations avoid penalties and reputational damage.

With Sarbanes-Oxley Act, internal audit has taken on an important role in compliance.

5. Conducting Investigations Into Suspected Fraudulent Activities:

Fraudulent activities can damage an organization. They can also lead to legal penalties.

Internal audit investigates suspected fraudulent activities. This helps organizations take action to prevent and deter fraud.

When investigating fraud, internal audits may use data analytics. This is a technology-based approach to identifying suspicious activity.

6. Preparing Reports On The Findings Of Audits:

Internal audit reports its findings to the board of directors and senior management.

The report discusses the results of the audit. It also makes recommendations for improving the organization.

Some reports are public. Others are confidential. The confidentiality of the report depends on the sensitivity of the information.

Reasons Internal Audit Is A Good Career Path (Pros)

There are many reasons why the internal audit is a good career path. Here are some of them:

1. Importance Of The Function:

Internal audit is a vital function in any organization. It helps organizations to achieve their objectives.

They ensure that their financial and operational activities are effective and efficient. They also help organizations comply with laws and regulations.

Some organizations have an internal audit department. Others have an internal audit function.

2. Stable Employment:

Internal audit is a stable career. The demand for internal auditors is high. The number of audit jobs will, in estimation, grow by 6% from 2021-2031. (BLS)

This is faster than the average for all occupations. The demand for internal audits is high. Organizations need to improve their operations and comply with regulations.

3. Job Stability & Variety:

As an internal auditor, you will have a stable job with variety. You will work in different departments and on different projects.

You will get to know the organization and its operations well. Some auditors move to other departments after a few years in the audit department.

And once you have gained experience, you can work independently.

4. Good Salary & Benefits:

As an internal auditor, you can expect a good salary and benefits. The median salary for an internal auditor is $67288.

Benefits can include things like:

– Health insurance

– Retirement savings plans

– Tuition reimbursement

Reasons Internal Audit Is Not A Good Career Path (Pros)

Now let’s look at why there may be better career paths for you than an internal audit.

1. You May Be Stuck In The Same Role:

If you don’t want to move up in your career, then internal audit may be a good fit. But if you’re looking for advancement, you may be stuck in the same position for a long time.

That is because the internal audit department is often small. And there are only so many positions to move up into.

And there may not be a lot of room for raises either. So if you’re looking to make more money, there may be better career paths than an internal audit.

2. You May Get Bored:

When you’re doing the same thing day in and day out, it can get pretty boring.

And that’s often the case with internal audits. So you may be auditing the same types of things repeatedly.

It can get pretty tedious after a while. And only some people may be up for that type of work.

3. Tension With Management:

There is often tension between the internal audit department and management.

Management may want to avoid hearing what internal audit department has to say.

They may see the internal audit department as a hindrance or obstacle to their goals.

And that can make for a pretty tense working environment.

4. It Can Be Stressful:

Like any job, internal audits can be stressful at times. But it can be especially stressful when there is tension with management.

And when you’re constantly auditing the same types of things. The deadlines and demands of the job can also add to the stress.

Skills Needed For An Internal Auditor

Let’s find out what skills you need to be an internal auditor.

1. Communication Skills:

As an internal auditor, you will need to communicate with all levels of management.

You will have to explain your findings and recommendations clearly and concisely.

You will also need to be able to listen to management’s concerns and questions.

2. Analytical Skills:

As an internal auditor, you will need to be able to analyze data and information.

You will need to be able to identify trends and patterns.

You will also need to be able to conclude your analysis. Therefore, when making recommendations, your analysis must be thorough and accurate.

3. Research & Writing Skills:

As an internal auditor, you will need to be able to research information. Strong research skills will help you find information to support findings and recommendations.

And with changing landscape of business, you will need to be able to keep up with the latest changes.

Your reports must be well-written and free of errors. So your writing skills are also important.

4. Technical Skills:

You will need to be proficient in computers and various software applications.

Most internal audit departments use auditing software to help them with their work.

So you will need to be comfortable using software such as:

– Microsoft Excel

– Word and

– PowerPoint

You should also be able to use email and the internet. Some organizations may require you to have specific software skills, such as:

– Knowledge of SQL or

– Experience using a certain type of auditing software.

So these are some skills you will need to have for the job.

What Are The Alternatives To Internal Auditor Role?

There are some alternative roles to the internal auditor role:

1. Senior Accountant:

As a senior accountant, you will be responsible for preparing financial statements. And you will ensure that they are accurate.

You will also be responsible for managing the accounts of a company.

Some other job responsibilities of a senior accountant include:

– Reviewing financial statements

– Identifying and correcting errors in financial statements

– Preparing tax returns

– Advising management on financial matters

They earn an average salary of $83699 per year. (Glassdoor)

2. Financial Analyst:

There is a difference between a financial analyst and an internal auditor. A financial analyst provides insights into a company.

They do this by analyzing a company’s financial statements.

They offer recommendations to a company on where they should invest their money.

An internal auditor analyzes a company’s financial statements to ensure they are accurate.

They earn up to $67507 per year on average. (Glassdoor)

3. Compliance Officer:

A compliance officer makes sure that a company is following the law. They ensure the company has all the required licenses and permits.

They also make sure that the company is following safety regulations.

If a company is not following the law, the compliance officer may recommend company get fined or sued.

The average salary for a compliance officer is $72229 per year. (Glassdoor)

Final Word:

So is internal audit a good career path? Internal audit is a great career path for those interested in finance.

There are many different positions within internal audit. So you can specialize in an area that interests you.

So if you want a career in finance, internal audit is a great option.

It is a stable and secure career with good job prospects and earning potential.

Frequently Asked Questions

So here are some frequently asked questions about internal audits:

1. Is Internal Audit A Good Career Path For Women?

Usually, corporate internal audit departments are male-dominated. But women can find good opportunities in this field.

There are many different positions within internal audit. So women can specialize in an area that interests them.

Internal audit is a stable and secure career. It has good job prospects and earning potential.

2. Is Internal Audit A Good Career Path For The Future?

As BLS data shows, the job outlook for auditors is bright. The profession will grow 6 percent from 2021-2031.

This is much faster than the average growth rate for all occupations. So internal audit is a good career choice for the future.

Last Updated on 3 months by Shahzaib Arshad