What Does an Internal Auditor Do?

In the accounting profession, becoming an internal auditor can offer endless growth opportunities, but before you dive into this accounting career path, you probably have questions, like, what is an internal auditor? What does an internal auditor do? What jobs are available? We're answering those questions and more to help you build a successful career in internal auditing.

What Is an Internal Auditor? 

Internal auditors are finance and accounting professionals who use their industry and auditing expertise to provide independent, objective evaluations of financial and operational activities. This is to ensure that a company remains compliant with laws and regulations, mitigates risks, and meets organizational goals.¹ 

Internal Auditor Job Description

Internal auditors have a big responsibility to provide the management of their companies with independent, risk-based, and objective assurance, advice, insight, and foresight.¹ 

They perform this function by reviewing and analyzing reports, processes, and data to find any places that are inefficient or unaligned with regulations and correct these areas quickly, before an external audit or third-party intervention.² 

Daily tasks within this role include:

Risk and Risk Assessment 

Internal auditors look for potential problems, even before they happen. Whether it be fraud risks, system failures, or organizational inefficiencies, the internal auditor's ability to identify and sidestep risks can help organizations avoid major losses. This includes: 

• Identifying financial, operational, and compliance risks
• Assessing the likelihood and impact of risks
• Evaluating effectiveness of the organization's risk management process
• Recommending steps to mitigate risks 
   

Internal Control Evaluation 

An organization's internal controls exist to prevent fraud and errors. An internal auditor's role involves evaluating these controls to make sure that they exist, are followed, and are strong enough to manage risks. This includes: 

• Testing internal controls like approvals and reconciliations
• Evaluating control design and operating effectiveness
• Identifying control weaknesses or gaps
• Suggesting improvements and strengthening controls 
   

Audit Work 

Hands-on audit responsibilities like reviewing data, interviewing employees, gathering information, and testing processes are an important part of an internal auditor's daily activities and vital to the audit process. This includes: 

• Planning the audit scope and objectives
• Conducting financial, operational, and IT audits
• Collecting and analyzing audit evidence
• Testing transactions and processes
   

Compliance and Regulatory Monitoring 

Internal auditors make sure that their organizations are compliant with all rules and regulations, reducing legal risks and ensuring credibility with stakeholders. This includes: 

• Reviewing compliance with regulations and accounting standards
• Evaluating execution of internal policies
• Monitoring regulatory changes that affect the organization
• Reporting compliance violations 
   

Reporting and Communication 

Auditors must create clear reports that convert complex data into actionable findings, helping leaders make optimal and informed decisions. This includes: 

• Preparing audit reports
• Presenting findings to decision-makers or audit committees
• Highlighting issues, risks, and inefficiencies
• Providing actionable insights and recommendations 
   

Follow-Up and Implementation 

Not only do internal auditors help point out risks within an organization, they help implement improvements to create long-term solutions. This includes: 

• Tracking progress on audit recommendations
• Verifying corrective actions
• Reassess previously identified issues
• Supporting continuous improvement efforts
   

Fraud Detection and Investigation 

Internal auditors can protect their organizations by identifying misconduct, fraud, or misuse of resources and take early corrective actions. This includes: 

• Identifying indicators of fraud
• Investigating suspicious transactions or financial behaviors
• Gathering evidence for reports
• Recommending controls to prevent fraudulence 
   

 Advisory and Process Improvement

Internal auditors provide reports and recommendations that are crucial for decision-makers leading the organization to reach its financial goals. This includes: 

• Recommending process improvements
• Advising management on best practices
• Helping optimize efficiency and cost savings
• Providing insights for strategic decisions 

Why Is an Internal Auditor Important? 

Internal auditors are incredibly valuable for any organization, helping companies:³ 

• Successfully achieve objectives
• Improve governance, risk management, and control processes
• Make and oversee decisions
• Enhance reputation and credibility with stakeholders
• Avoid incompliance and its consequences 
   

Internal Auditor Skills 

When digging deeper into the question, "what is an internal auditor?" we have to consider the skills required. Being an internal auditor requires that you develop your auditing skillsets and continue refining your knowledge throughout your career. 

The Institute of Internal Auditors (IIA®) is the standard-setter for the internal auditing profession. As the governing body of the Certified Internal Auditor (CIA) credential, the gold standard for internal auditors, The IIA® defines this competency framework for essential skills that internal auditors need to thrive:⁴

Internal Auditor vs External Auditor 

Internal and external auditors share some of the same skillsets, as they both share auditing functions and need an in-depth knowledge of auditing best practices. However, there are distinctions between internal and external auditor career paths.

Internal Auditor Job Opportunities 

Like all career paths, you can begin as an entry-level internal auditor and work your way up through experience, certifications, and continuing professional education (CPE) to upper-level management roles. 

Job opportunities for those just starting out in internal auditing may include:⁶ 

• Internal audit assistant
• Junior analyst
• Risk consulting associate
• Audit staff member 

To grow your career and expertise, you can earn the international gold standard credential for internal auditors, the Certified Internal Auditor (CIA) certification. Likewise, even if you plan to work as an internal auditor, earning your Certified Public Accounting (CPA) license will equip you with the skillset and authority to advance in this field. These credentials will open many more job opportunities for you, including: 

• Compliance analyst
• Sr. internal auditor
• Team lead, compliance
• Sr. IT auditor
• Audit manager 

Part of maintaining your CIA and CPA credentials in good standing requires that you complete annual CPE learning. This gives you the chance to expand and deepen your skillsets and specialize within the field. You can take audit courses, of course, as well as learn more in data and technical subjects, a specific industry, or leadership and team management areas. This will help you earn job titles such as: 

• CFO
• Internal audit director
• Audit team leader
• Audit manager
• Financial director 
   

What Is the Internal Auditor Salary? 

Accounting salary insights, including internal auditor salaries, depend heavily on several factors, including location, experience, industry, and certifications. 

The average internal auditor salary is around $70,000^7. However, the Certified Internal Auditor (CIA) salary is 37%-50% higher than that of non-certified professionals, with senior-level Certified Internal Auditors earning an average $200,000+ annually.  

Become a Certified Internal Auditor^® 

So what is an internal auditor? Could this be a great speciality for you? We understand that getting started on your career journey can be overwhelming—but don’t let that stop you from achieving your goals! 

Get Becker support, starting with our Certified Internal Auditor^® (CIA^®) exam review course. The CIA credential is the gold standard for internal auditors, opening endless career advancement opportunities. Our CIA Exam Review is created in partnership with the credential's governing body and team who wrote the exam, The Institute of Internal Auditors® (The IIA®).