What Is the Role of an Internal Auditor in Internal Control?

An internal auditor ensures that an organization's books are correctly recorded and up to date.

An internal auditor is responsible for overseeing all the financial records for his or her organization. The purpose of employing an internal auditor is to catch any accounting irregularities. The process of ensuring the integrity of the accounting and finance records within an organization is referred to as internal control. Essentially, the internal auditor is the "gatekeeper" of internal control measures, because he or she is usually the one performing checks on the system.

Internal Control

The objective of implementing internal controls is to evaluate the effectiveness and efficiency of the organization, to maintain the integrity of the organization's financial records, and to ensure that the organization is compliant with state and federal laws. Most organizations have systematic measures in place so they can consistently monitor the internal controls. In addition, the controls need to be updated on a regular basis to reflect changes in regulation.

Duties

An internal auditor reviews all accounting activity within a specific department or throughout the entire organization (depending on the size). Some of the pieces of information an internal auditor looks at includes assets, liabilities, expenses, revenues, cash flow statements, dividends issues and stock. It is the internal auditor's responsibility to determine if the books are intentionally being tampered with or if mistakes have been made in the recording process.

Significance

An internal auditor's job duties and the overall objectives of an internal controls system go hand in hand. For instance, both an internal auditor and an internal controls system are looking for instances of fraud and any errors that may have been committed. Basically, the internal controls system is the set of procedures in place that need to be followed to detect any abnormalities. The internal auditor is the individual who follows these procedures and makes the ultimate judgment on whether everything is recorded correctly.

Salary and Education

To become an internal auditor, a candidate needs a four-year degree from a higher learning institution. The degree must have a strong concentration in finance or accounting. A candidate wishing to demonstrate his or her commitment and excellence in auditing may also choose to obtain the Certified Internal Auditor (CIA) designation. The certification requires a number of training courses and the passing of several examinations.

According to Salary.com, the median starting salary of an entry-level internal auditor is around $47,995. Internal auditors in the 25th percentile earn closer to $43,000, while internal auditors in the 75th percentile earn around $53,000. As with all salaries, the type of hiring firm, a candidate's accolades and the job's location are big determining factors in the salary received.

Considerations

The internal auditor position within an organization will continue to become increasingly demanding as more and more organizations begin to implement complex internal controls. A candidate considering a career in internal auditing should be aware that a strong interest in numbers and order is absolute necessary to be successful. Furthermore, an internal auditor must be very trustworthy, because he or she will be in control of an organization's financial records.

References

• South Dakota Board of Regents: Internal Auditor
• University of California: Internal Controls
• Business Dictionary: Internal Controls
• Salary Wizard: Internal Auditor