Internal Auditor
Career information and advice on being a Internal Auditor

The word “audit”, is very often associated with external audit, which is carried out by Accountants and applied to financial systems. Internal Auditors have their own skills, qualifications, technical standards and codes of practice, all of which are provided through the internal audit professional body - the Institute of Internal Auditors - UK and Ireland (IIA). Whilst the financial skills of Accountants are very useful, the profession of internal audit is fundamentally concerned with evaluating an organisation’s management of risk. All organisations face risks such as those to the organisation’s reputation if it treats customers incorrectly, health and safety risks, risks of supplier failure, risks associated with market failure, IT risks and financial risks.

The key to an organisation’s success is to manage those risks effectively - more effectively than competitors and as effectively as stakeholders demand. The role of the Internal Auditor is to provide assurance to management that all key risks are being managed effectively. To do this, the Internal Auditor will evaluate the quality of risk management processes, systems of internal control and corporate governance processes across all parts of an organisation and report this directly and independently to the most senior level of management.

As well as providing assurance, an Internal Auditor’s knowledge of the management of risk enables them to act as consultants and catalysts for improvement in an organisation's practices. For example, if a Line Manager is concerned about a particular area of his responsibility, working with the Internal Auditor could help to identify improvements. Or perhaps a major new project is being undertaken - the Internal Auditor can help to ensure that project risks are clearly identified and controls put in place to manage them.

By reporting to senior management that important risks have been evaluated and highlighting where improvements are necessary, the Internal Auditor helps senior management to demonstrate that they are managing the organisation effectively on behalf of their stakeholders. Hence, Internal Auditors, along with executive management, non executive management and the External Auditors, are a critical part of the top level governance of any organisation.

Internal Auditors have to be independent people who are willing to stand up and be counted. Their employers value them because they provide an independent, objective and constructive view. To do this they need a remarkably varied mix of skills and knowledge. They might be advising the project team running a difficult change programme one day or investigating a complex overseas fraud the next.

Your Functions May include

Below are the key functions of an Internal Auditor. Within these areas it is important to think of the Internal Auditor as the organisations’ critical friend – someone who can challenge current practice, champion best practice and be a catalyst for improvement so that the organisation as a whole achieves its strategic objectives.

• Evaluate controls and advise managers at all levels
  Internal audit’s role in evaluating internal controls is wide ranging because everyone from the mailroom to the boardroom is involved in internal control. The Internal Auditor’s work includes assessing the tone and risk management culture of the organisation through to evaluating and reporting on the effectiveness of the implementation of management policies at another.
   
• Evaluate risks
  Internal Auditors identify key activities and relevant risk factors and assess their significance. Changing trends and business/economic conditions impact the way the internal auditor assesses risk. The techniques of internal auditing have changed from a reactive and control based form to a more proactive and risk based approach. This enables the Internal Auditor to anticipate possible future concerns and opportunities as well as identifying current issues.
   
• Analyse operations and confirm information
  Achieving objectives and managing valuable organisational resources requires systems, processes and people. Internal Auditors work closely with Line Managers to review operations and then report their findings. The Internal Auditor must be well versed in the strategic objectives of their organisation so that they have a clear understanding of how the operations of any given part of the organisation fit into the bigger picture.
   
• Review compliance
  Compliance review is all about ensuring that the organisation is adhering to rules, regulations, laws, codes of practice, guidelines and principles as they apply individually and collectively to all parts of their organisation.