01.06. Building a Career in Internal Auditing: Pathways and Qualifications

Key Questions

Briefly reflect on the following before we begin:

• What are the typical educational and professional pathways leading to a career in internal auditing?
• How do certifications and credentials like CIA, CISA, and CPA enhance an internal auditor’s career?
• What skills and competencies are essential for success in modern internal auditing?
• How does continuous learning and professional development contribute to career advancement in internal auditing?

Embarking on a career in internal auditing opens doors to a dynamic and rewarding profession where individuals play a vital role in enhancing organizational governance, risk management, and control processes. This section guides aspiring internal auditors, offering insights into the pathways, qualifications, and critical considerations for building a successful career in this field.

Educational pathways and entry points into the profession form the cornerstone of a successful career in internal auditing. Whether through undergraduate degrees in accounting, finance, business administration, or specialized master’s programs in internal auditing or related fields, individuals can acquire the foundational knowledge and skills needed to excel in the profession. Moreover, certifications and credentials such as the Certified Internal Auditor (CIA), Certified Information Systems Auditor (CISA), and Chartered Professional Accountant (CPA) provide validation of expertise and enhance professional credibility, opening doors to diverse career opportunities and advancement.

In addition to academic qualifications, the modern internal auditor must possess diverse skills and competencies to navigate the complexities of the profession. From analytical thinking and problem solving to communication and stakeholder management, internal auditors must continually hone their abilities to adapt to evolving business environments and emerging audit trends. Furthermore, career progression and specialization areas allow internal auditors to carve out unique career pathways tailored to their interests and strengths, whether in areas such as IT audit, risk management, or compliance. By embracing continuous learning, networking, and professional development opportunities, individuals can chart a fulfilling and impactful career journey in internal auditing, with global opportunities and mobility further enriching their professional experiences and perspectives.

Educational Pathways and Entry Points into the Profession

Building a career in internal auditing offers a wide array of pathways and entry points, reflecting the diverse nature of the profession. This career is not only about financial acumen but also demands a keen understanding of operational processes, risk management, and regulatory compliance. The educational pathways and entry points into this dynamic field are as varied as the required skill sets.

A solid foundation in accounting, finance, or business is typically the starting point for a career in internal auditing. Many internal auditors hold a bachelor’s degree in these disciplines. However, the field is also accessible to those with degrees in information technology, engineering, and other areas, especially as organizations increasingly value diverse perspectives and skills in understanding and evaluating their operations and risks. Advanced degrees can further enhance an internal auditor’s knowledge and career prospects. A master’s in business administration (MBA) or Accounting offers more profound insights into business strategies and financial management. Specialized degrees in risk management, information systems, or forensic accounting also provide a competitive edge, aligning educational background with specific areas within internal auditing.

Entry-level positions in internal auditing typically start with titles such as Internal Audit Associate or Junior Internal Auditor. These roles offer newcomers a chance to apply their academic knowledge in real-world settings, gaining experience in various audit processes and methodologies. For those transitioning from related fields, such as accounting or finance, positions like these serve as a bridge, allowing them to leverage their existing skills while acquiring the specific competencies needed for internal auditing. Internships provide another valuable entry point. Many organizations offer internships in their internal audit departments, giving students and recent graduates hands-on experience and exposure to the profession’s challenges and rewards. Internships can lead to full-time positions and are an excellent way to build a professional network. The evolving scope of internal auditing has created opportunities for professionals with IT, law, engineering, and data analytics backgrounds. Specialists in these areas can enter the profession through roles focused on IT auditing, compliance auditing, or risk assessment. Their expertise contributes to the comprehensive evaluation of organizational risks and controls, reflecting the interdisciplinary nature of modern internal audits.

Relevant Certifications and Credentials

Certifications and credentials, such as knowledge, competence, and professionalism, are significant benchmarks in internal auditing. Pursuing relevant certifications enhances an auditor’s skill set and boosts career prospects by demonstrating commitment and expertise to employers and peers. Among the various certifications available, the Certified Internal Auditor (CIA), Certified Information Systems Auditor (CISA), and Chartered Professional Accountant (CPA) are particularly noteworthy.

• Certified Internal Auditor (CIA): The CIA designation offered by The Institute of Internal Auditors (IIA) is the most recognized certification for internal auditing. The CIA credential signifies a strong foundation in internal auditing standards and practices. To obtain the CIA certification, candidates must pass a comprehensive examination covering risk management, control practices, and audit processes. The CIA certification is ideal for professionals seeking to establish or advance their careers in internal auditing.
• Certified Information Systems Auditor (CISA): As technology becomes increasingly integral to organizational operations, the demand for auditors with information systems expertise has grown. The CISA certification, offered by the Information Systems Audit and Control Association (ISACA), focuses on information system auditing, control, and security. Candidates must pass an exam that tests their knowledge in information systems auditing, governance, system acquisition, development, and implementation and how IT and business systems are protected, monitored, and reviewed. The CISA certification suits IT audit, assurance, and security auditors.
• Chartered Professional Accountant (CPA): While the CPA certification is primarily associated with accountants, it is also highly valued in internal audits. The CPA credential demonstrates a comprehensive understanding of accounting principles and financial reporting practices. CPAs often work in internal auditing roles that require a deep understanding of financial controls, compliance, and accounting standards. To become a CPA, candidates must pass the Common Final Examination (CFE) and meet additional province-specific education and work experience requirements.

Internal auditors may pursue several other certifications, depending on their specialization or interest. These include the Certified Fraud Examiner (CFE), which focuses on fraud prevention, detection, and investigation, and the Certification in Risk Management Assurance (CRMA), which specializes in risk management and assurance. Earning a certification is essential in an auditor’s career but keeping that certification through continuing professional education is equally important. Certified professionals must complete a specified number of continuing professional education (CPE) hours within a reporting period to stay current with the evolving practices and standards of internal auditing.

Skills and Competencies for the Modern Internal Auditor

The modern internal auditor requires a blend of traditional skills and new competencies to navigate the complexities of today’s business environment. As organizations evolve, so do the expectations placed on internal auditors, demanding a more dynamic skill set beyond financial expertise. Here are the essential skills and competencies for today’s internal auditor:

• Analytical Skills: Internal auditors must possess strong analytical skills to interpret data, identify trends, and understand the implications of their findings. With the rise of data analytics in auditing, it is crucial to analyze vast amounts of information and make sense of it. These skills help auditors to pinpoint risks, uncover inefficiencies, and recommend improvements.
• Technical Proficiency: Auditors need a solid understanding of information systems, cybersecurity, and digital audit tools due to the increasing reliance on technology. Familiarity with blockchain, AI, and data analytics platforms enhances an auditor’s ability to assess technological risks and controls. This technical proficiency is essential for evaluating the integrity and security of information systems.
• Communication Skills: Effective communication is pivotal for internal auditors. They must clearly articulate audit findings, recommendations, and the rationale behind them to stakeholders with varying levels of understanding. This includes writing comprehensive audit reports and presenting complex information in a clear and accessible manner.
• Critical Thinking: Internal auditors must approach their work with professional skepticism, questioning assumptions and considering potential biases. Critical thinking enables auditors to evaluate evidence, solve problems, and make informed judgments. This competency is vital for assessing the effectiveness and adequacy of internal controls and risk management practices.
• Ethical Integrity: Ethical integrity is the cornerstone of the auditing profession. Internal auditors must adhere to high moral standards, maintaining objectivity and confidentiality. This commitment to ethics builds trust and ensures audit activities are conducted honestly and impartially.
• Business Acumen: Internal auditors must understand the organization’s industry, operations, and strategic goals. This business acumen allows auditors to align their work with the organization’s objectives, providing relevant and value-added insights. A deep understanding of the business also enables auditors to identify emerging risks and opportunities.
• Adaptability: Adapting to change is increasingly important for internal auditors. This includes staying abreast of regulatory changes, evolving industry practices, and emerging risks. Adaptability also means flexibility in audit planning and execution, responding to unexpected challenges and shifting priorities.
• Interpersonal Skills: Internal auditors frequently interact with individuals across the organization. Strong interpersonal skills are essential for building relationships, facilitating cooperation, and conducting interviews during audits. These skills help negotiate audit findings and recommendations, ensuring a constructive and collaborative approach.
• Project Management: Audits require planning, execution, and monitoring. Skills in project management enable auditors to manage audits efficiently, ensuring that objectives are met within the allocated timeframe and resources.
• Continuous Learning: Internal auditing is constantly evolving, making continuous learning a critical competency. Internal auditors must be committed to professional development, seeking opportunities to expand their knowledge and skills. This includes pursuing certifications, attending workshops, and staying current with industry trends.

Career Progression and Specialization Areas

Career progression in internal auditing offers a dynamic pathway with numerous opportunities for specialization and advancement. As internal auditors develop their skills and gain experience, they can move through various roles, each offering unique challenges and responsibilities. Additionally, internal auditing encompasses several specialization areas, allowing professionals to tailor their careers to their interests and the needs of the organizations they serve.

Career Progression

• Entry-Level Auditor: Starting as an Internal Audit Associate or Junior Auditor, individuals at this level focus on learning the basics of the audit process, including conducting audit tests, documenting findings, and understanding the organization’s policies and procedures. This stage is crucial for building a solid foundation in internal auditing.
• Senior Auditor: With experience, auditors can progress to a Senior Auditor position, where they take on more complex audits, lead audit teams, and begin to specialize in specific areas. Senior Auditors are responsible for planning and executing audit engagements and mentoring junior auditors.
• Audit Manager: Moving into management, Audit Managers oversee multiple audit projects, manage teams, and develop audit strategies aligned with organizational goals. They are crucial in communicating audit findings to senior management and ensuring the audit function adds value to the organization.
• Chief Audit Executive (CAE) or Director of Internal Auditing: At the pinnacle of the career ladder, the CAE or Director leads the internal audit department, sets the strategic direction for internal auditing within the organization, and advises the board and executive management on governance, risk, and control issues.

Areas of Specialization

• Financial Auditing: Focuses on the accuracy and integrity of financial records and reports, ensuring compliance with accounting standards and regulatory requirements.
• Operational Auditing: Involves evaluating the efficiency and effectiveness of organizational operations, including processes, policies, and procedures.
• Compliance Auditing: Concentrates on assessing adherence to laws, regulations, and internal policies, identifying areas of non-compliance and recommending corrective actions.
• Information Technology (IT) Auditing: Specializes in examining the controls around information systems and technology infrastructure to ensure data integrity, security, and availability.
• Risk Management: Focuses on identifying, assessing, and managing risks that could impact the organization’s ability to achieve its objectives.
• Sustainability and Environmental Auditing: Evaluating an organization’s environmental impact and sustainability practices, ensuring compliance with environmental laws and regulations, and assessing the organization’s commitment to sustainable operations.
• Fraud Examination: Specializes in detecting, investigating, and preventing fraudulent activities within the organization.

Development within the internal auditing profession is dynamic and often involves gaining experience across different specialization areas. Continuous learning, obtaining relevant certifications, and building a professional network are critical components of career development in internal auditing. Professionals should also seek opportunities for cross-functional projects, international assignments, and leadership roles to broaden their experience and enhance their skill set.

Networking, Mentoring, and Professional Development

Networking, mentoring, and professional development are pivotal elements in building a successful career in internal auditing. These components facilitate knowledge sharing and skill enhancement and open doors to career opportunities and advancement. Let’s explore how each contributes to a thriving career in internal auditing.

Networking involves creating and maintaining professional relationships within and outside one’s organization. For internal auditors, networking can lead to learning about best practices, emerging trends, and innovative audit techniques. Professional associations such as The Institute of Internal Auditors (IIA) and the ISACA host conferences, seminars, and webinars that provide excellent networking opportunities. Participating in these events allows auditors to connect with peers, industry experts, and thought leaders, fostering a community of learning and support. Online platforms like LinkedIn also offer avenues for networking, enabling auditors to join special interest groups, participate in discussions, and share insights. Engaging with the internal audit community through social media and online forums can enhance one’s professional profile and visibility.

Mentoring involves guidance and support from more experienced professionals in the field. Having a mentor can significantly impact the career development of a new or aspiring internal auditor. Mentors provide advice on career progression, help navigate workplace challenges, and offer insights into the profession’s intricacies. They can introduce mentees to their network, further expanding the mentees’ professional connections. Organizations often have formal mentoring programs, but informal mentoring relationships can also be established through professional associations or personal initiatives. Seeking a mentor who aligns with one’s career aspirations and values can be crucial to professional growth.

Continuous professional development is essential in keeping pace with the rapidly changing landscape of internal auditing. It involves engaging in education and training activities that enhance knowledge, skills, and competencies. This can include pursuing advanced degrees, attending workshops and courses, obtaining certifications, and participating in industry-specific training. Professional development also encompasses updating the latest audit standards, regulations, and technologies impacting the profession. Reading industry publications, subscribing to professional journals, and participating in online learning modules are ways to ensure continuous learning.

The Role of Continuous Learning in Career Advancement

The role of continuous learning in career advancement for internal auditors is paramount. In a profession marked by rapid changes in technology, regulations, and business practices, staying informed and adaptable is not just beneficial—it is essential. Continuous learning ensures that internal auditors maintain the relevance and effectiveness of their skills, enhancing their career prospects and contributing to the overall value they bring to their organizations.

• Staying Current with Industry Changes: Internal auditors must keep abreast of the latest developments in accounting standards, auditing techniques, regulations, and compliance requirements. This constant evolution demands a commitment to ongoing education. By staying current, auditors can anticipate the impacts of changes on their organization and advise management proactively.
• Enhancing Professional Competence: Continuous learning involves deepening existing knowledge and acquiring new skills. This might mean developing expertise in data analytics; cybersecurity; or environmental, social, and governance (ESG) auditing for internal auditors. Expanding one’s skill set opens up new areas of specialization and increases the auditor’s versatility and value to the organization.
• Professional Certifications and Credentials: Pursuing additional professional certifications such as the Certified Internal Auditor (CIA), Certified Information Systems Auditor (CISA), or Certified Fraud Examiner (CFE) is a crucial aspect of continuous learning. These credentials not only validate an auditor’s expertise and commitment to the profession but also often require the completion of CPE credits to maintain certification, thereby encouraging ongoing learning.
• Networking and Knowledge Sharing: Continuous learning also occurs through networking with peers and participating in professional organizations. Forums, conferences, and seminars offer opportunities to learn from industry leaders and share best practices. Engaging in these activities helps auditors stay connected to the broader audit community and learn from the experiences of others.
• Adapting to Technological Advances: As new technologies emerge, internal auditors must learn to leverage these tools to enhance audit effectiveness. Whether adopting advanced data analytics for audit testing or understanding blockchain’s implications for financial reporting, auditors must be technologically adept. Continuous learning in technology ensures auditors can efficiently evaluate and advise on tech-related risks and controls.
• Fostering a Culture of Learning: Organizations that promote a culture of continuous learning recognize the long-term value it brings. Encouraging employees to pursue further education, training, and certifications enhances their capabilities and fosters a more knowledgeable and proactive audit function. Employers may support this by providing access to training resources, sponsoring attendance at industry events, or offering tuition reimbursement for relevant courses.

Global Opportunities and Mobility in Internal Auditing

Global opportunities and mobility in internal auditing reflect the profession’s expansive reach and the growing demand for audit professionals worldwide. This dynamic aspect offers internal auditors unique opportunities to work in diverse industries, cultures, and regulatory environments, enhancing their career prospects and professional growth.

The global nature of business today means that many organizations operate across borders, requiring internal auditors adept at navigating international regulations, cultures, and business practices. Opportunities for international assignments may arise within multinational corporations, non-governmental organizations, and global public sector entities. These roles often involve assessing the effectiveness of governance, risk management, and control processes across different countries and business units, providing auditors with a broad perspective on global business operations. Additionally, global regulatory developments and the need for compliance in areas such as anti-money laundering, data protection, anti-bribery, and corruption have increased the demand for internal auditors with specialized knowledge. Professionals with expertise in international standards and regulations are therefore highly valued and sought after.

Mobility within the internal audit profession is not just about geographical movement but also career development and progression. Internal auditors can move across different sectors, from financial services to manufacturing, healthcare, and the public sector, allowing them to diversify their experience and expertise. Such cross-sector mobility can enrich an auditor’s understanding of various business models, operational risks, and control frameworks, making them more versatile and adaptable professionals. The ability to work in different parts of the world and across industries also facilitates personal and professional growth, offering auditors exposure to new challenges and learning opportunities. It can lead to a deeper understanding of global business risks, regulatory compliance, and cultural nuances that affect auditing practices.

To take advantage of global opportunities and mobility, internal auditors should focus on developing a set of critical skills and attributes, including:

• Language Proficiency: Fluency in multiple languages is a significant advantage in global roles.
• Cultural Awareness: Understanding and respecting cultural differences is crucial for effective communication and collaboration in a global setting.
• Adaptability: Flexibility and the ability to adapt to new environments, regulations, and business practices are essential for success in international assignments.
• Technical Expertise: A strong foundation in international standards, regulations, and practices in internal auditing, as well as specialized knowledge in cybersecurity, fraud, and compliance, is highly beneficial.