Part of running a large company is making sure its finances are in order and well documented. In order to make sure all business activities are in order, a company may choose to hire an internal auditor, or a person who assesses business activities, identifies any potential problems, and makes reports to management. If you have an eye for detail and a strong business acumen, you might be a good fit for the profession of internal auditing.
What Does an Internal Auditor Do?
If you’re still considering different career paths, it’s a good idea to have an understanding of a day in the life of an internal auditor before you start working toward your degree and/or certification. Being an internal auditor isn’t necessarily a high-profile position like being a CEO or CFO, but a good internal auditor is essential to a company’s success.
Unlike a CEO or CFO, an internal auditor is meant to be impartial, and much of what they do is similar to consulting work. For instance, part of the job is making sure that the company’s books are in perfect order in case of an audit by the Securities and Exchange Commission (SEC) or similar organization. To succeed in this field, you need to have impeccable attention to detail — after all, an internal auditor looks for even the tiniest discrepancies in expense reports, fiscal statements, and more. Because the auditor isn’t a part of any department they oversee, they can give what’s essentially third-party advice to optimize departmental and company performance.
Similarly, an internal auditor also helps make sure that all of a company’s operating procedures are in line with the law and any existing rules and regulations. They are also responsible for creating risk assessments for a company’s different departments. For instance, an internal auditor may look for evidence of fraud risk or legal difficulties. They also monitor for any type of mismanagement or policy violation. While each day in the life of an internal auditor may look a little different, the ultimate goal of the job is to make sure that the financial and business side of a company is operating as well as it possibly can.
The exact job duties you need to do will depend on the type of company you work for. Internal auditors need to be flexible people with expertise in a few different areas. Accounting knowledge is useful, and you’ll need to have some managerial skills (especially if you’ll be working with a team or one day want to be an audit executive). And of course, a decent business acumen is important.
What Certification Do You Need to Be a Certified Internal Auditor?
While you may be able to earn several different certifications as an internal auditor, there’s only one certification that is accepted worldwide. This is the certification from the Institute of Internal Auditors, a professional association that currently has over 175,000 members. Earning this certification involves a few different steps. First, you’ll need to meet the Institute’s criteria for eligibility. If you meet these requirements, you’ll need to pass the Certified Internal Auditor exam to demonstrate you have the right knowledge and skills for the job. And finally, if you pass the exam, you’ll need to complete continuing education to maintain your certification. It’s a lot of work, but if you’re serious about becoming an internal auditor, this is the best career path to take.
As a side note, while it isn’t required, plenty of people looking to become internal auditors earn a Certified Public Accountant (CPA) certification. This certification can help significantly with the accounting side of being an internal auditor. In particular, becoming a CPA while also earning a degree in finance, accounting, or something similar will give you a good foundational knowledge for the field and for a certification if you choose to pursue one.
What Are the Eligibility Requirements for the Certification?
Before even taking the Certified Internal Auditor exam, you’ll need to meet the necessary eligibility criteria. First, you’ll need to make sure you have sufficient education. Ideally, you’ll need to have at least a bachelor’s degree in business, accounting, finance, or a related field. The degree needs to be from an accredited institution. Alternatively, you can have a combination of two years of education at the university level combined with five years of professional experience in internal auditing. If you have no university-level education, you can still meet eligibility criteria if you have seven years of related professional experience.
In addition to education, you’ll also need to demonstrate that you have sufficient work experience to earn a certification. You can accumulate the experience needed either before or after taking and passing the Certified Internal Auditor exam. You need at least two years of internal auditing experience. You also can have a master’s degree in a related field combined with one year of experience with internal auditing.
Before you’re certified, the Institute also needs to confirm that you’re a person of good character. You can submit a character reference letter from either a supervisor or an auditing professional with appropriate credentials. Once you become credentialed, you’ll be expected to adhere to the Institute’s ethical code.
And lastly, you will of course need to provide proof of identity before receiving your certification. This is probably the simplest part of the process — you just need a passport or a card that provides national identification. Because the application to become a Certified Internal Auditor is so complex, the Institute of Internal Auditors maintains an online candidate portal where you can upload and keep all of the necessary documents in one place.
What’s on the Certified Internal Auditor Exam?
Most exams for professional associations are designed to challenge you and test your knowledge, and the Certified Internal Auditor exam is no exception. However, unlike some tests, this one doesn’t have a set curriculum or class you need to pass before taking it — the idea is to develop a strong working knowledge of everything you need to be a successful internal auditor. This is part of the reason you need some work experience before becoming certified. Once you’ve had to apply the necessary principles, internalizing and remembering them will be much easier. Still, even after work experience, it’s a good idea to study the necessary principles. This is something you can do on your own, but you also have the option of attending a review course that takes you through what you need to pass.
The exam itself is broken up into three parts. The first part is the longest — it has 125 questions and you have 2.5 hours to complete it. Part I essentially covers the Institute of Internal Auditors International Professional Practices Framework (IPPF), a guideline for working as an internal auditor. This part of the exam includes questions on quality assurance and improvement, managing risk, ensuring objectivity and independence, general proficiency, and assessing fraud risk. In short, this part is a test on the basics of being an internal auditor.
Part II has 100 questions, and you’re given two hours to complete them. While Part I focuses on internal auditing basics, Part II focuses on performance. It covers the overall management of the auditing process, and it also tests you on planning, executing, and communicating the results of the audit.
Part III is the final part of the exam, and it also has 100 questions and a two-hour time limit. This part covers the business concepts you need to know in order to be a successful internal auditor. It will test you on financial management, information technology and security, and general business acumen.
Though the exam itself might sound grueling, it’s an effective way to test your knowledge to see if you’ve truly mastered the science of internal auditing. Once you’ve passed it and accumulated the necessary work experience, you’ll be a Certified Internal Auditor. It’s important to take the exam and the rest of the certification process seriously, as it’s designed to be especially difficult. Globally, less than half of applicants pass and are certified. In 2019, the Institute of Internal Auditors reports that only 42% of applicants were ultimately certified. In 2018, 43% were certified. If you don’t pass the first time you take the exam, you can always take some additional time to study before re-taking it.
What Are the Continuing Education Requirements?
While completing continuing education for any field can be a bit of a hassle, this requirement isn’t nearly as demanding as taking the initial exam. The exact number of hours you’re required to complete depends on your status as an internal auditor. Since the Institute recognizes that a significant amount of work goes into studying for and passing the exam, internal auditors who have just passed the exam will receive a credit for 40 hours of continuing education for both the year they passed the exam and the following year. Most internal auditors are asked to complete 40 hours of continuing education per year.
Logistically speaking, continuing education isn’t especially difficult to complete. Most opportunities take the form of online courses or webinars, and the Institute of Internal Auditors website has links to several continuing education opportunities. Once you’ve completed your continuing education, you’ll need to submit a form certifying that you’ve completed the requisite hours on or before December 31.
Why Should You Get Certified?
As you can likely see, the road to becoming a Certified Internal Auditor is a long and challenging one. And you don’t necessarily have to have the certification to work as an internal auditor. So why do it at all?
Becoming a Certified Internal Auditor has several different advantages. For one, becoming certified is a great way to demonstrate the fact that you’re committed to your profession and willing to work extremely hard to improve at it. And of course, a certification results in well-deserved respect in the field. After all, you can often find work as an internal auditor right after getting an education, but becoming certified takes greater knowledge, time, and commitment.
However, some of the advantages of becoming certified are monetary. Unsurprisingly, Certified Internal Auditors tend to make significantly more than their uncertified counterparts. According to a study by the Institute of Internal Auditors, a Certified Internal Auditor can make up to 51% more than those who are not certified. A certification also makes advancement in your career easier and more likely, which opens doors to higher salaries over time. Though the process itself does take some money, it’s an investment in your future that’s very likely to pay off.
Is There a Next-Level Certification You Can Get?
Once you become a Certified Internal Auditor and find yourself advancing in the field, you might start looking for additional certification programs. The Institute of Internal Auditors offers a second certification, called the Qualification in Internal Audit Leadership (QIAL). As the name suggests, this certification is designed for those who want to combine leadership ability with high-level internal auditing skills. This isn’t a certification for everyone, but if you’re an internal audit executive (or want to be one), this is the certification to get.
The QIAL application is a more demanding process than the CIA process. Candidates need to d the same identity verification and character reference steps, and they also need to verify work experience. Depending on your experience, you can take one of two certification pathways. Pathway 1 is for “New Leaders” and “Aspiring Leaders,” which generally means those with less audit executive experience. In this pathway, you’ll need to present three audit case studies, make a presentation for a panel, and complete a panel interview.
Pathway 2 is designed for “Experienced Leaders” and “Experienced Instructors.” These applicants tend to have more work and leadership experience. Instead of case studies, these applicants can submit a portfolio of their professional experience. They also will need to make a presentation before a panel and complete an interview.
Of course, the QIAL application isn’t something to immediately jump into after becoming a Certified Internal Auditor. But as you look ahead to plan your career, it’s something you may want to keep in mind.
Becoming a Certified Internal Auditor is certainly a challenge, but it’s a widely respected way to distinguish yourself in the field. After schooling and some experience (or after several years of experience alone), earning this certification will challenge you while giving you impressive opportunities for career advancement. If you’re ready to take the next step, start working toward becoming a Certified Internal Auditor today.
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