FollowGiven how vital financial accuracy is, it comes as no surprise that internal auditors have slowly morphed into some of the most important business operatives. In fact, companies that reach formidable revenue are now often mandated to hire them. Doing so helps maintain a transparent and trustworthy reporting system that the investors can rely on. It also facilitates smoother external audits, which internal specialists can help with.
While it has been around for almost as long as the practice of accounting, many entrepreneurs have a very limited understanding of the practice. Outside of proofreading the financial statements, what exactly do auditors do? More importantly, who are “internal” auditors?
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Internal Auditors
Regardless of the countless divisions of the audit profession, there are generally two directions in which one goes with their career; these include the public and the private sector. The public sector deals with companies that are trading on the market. Even when they do not work for publicly traded companies, these professionals will still engage in public accounting.
The internal side of things, however, pertains to either private businesses or non-public accounting. For instance, unlike the aforementioned, internal auditors can work for family-owned ventures that are relatively small. Also, their employers seldom offer stocks or any type of investment option for outside investors. Hence why they are deemed to be “private.”
Responsibilities of Internal Auditors
The main responsibility of internal auditors is to ensure that companies’ financial statements comply with the regulations. To do so, however, they must employ an extremely versatile set of skills, especially when it comes to risk management, research, cross-department communication, budgeting and more. They also need to pursue on-going education and training as they maintain their eligibility to work in a field that is constantly changing.
Just consider, for instance, the impact that the tax law changes from 2017 had on the business sphere. Alongside with Chief Financial Officers, also known as CFOs, internal auditors were the first line of defense when it came to preparing annual reports under the new guidelines.
Typical Day of an Internal Auditor
Courtesy of the ever-changing industry and a broad range of responsibilities, it is hard to create a daily blueprint for an internal auditor. They usually stay busy with many different engagements and administrative duties. For example, while an internal auditor working for a smaller firm may focus on maximizing profits, those who operate for larger entities will usually prioritize compliance. Why? Because bigger companies, which often earn much more in revenue than their smaller counterparts, face much more scrutiny for any misstatements.
Prospective internal auditors should also prepare to spend a ton of hours outside of their office. Although they will not travel as much as public accountants do, they may still need to attend a wide range of events, the likes of which include conferences, client meetings, and important negotiations.
Expected Skills
Though the training and educational requirements are quite rigorous, the Bureau of Labor Statistics showcases that the time spent studying pays off. As of 2018, the median salary for auditors was over $70,000. Compared to the national average, which is around $50,000, these workers can certainly build a lucrative career much faster.
It is also possible that, depending on the company, some practicians work on tasks that are usually not seen elsewhere. For instance, some folks even assume the roles of financial planners, risk analysts, managers and more. So, working as an internal auditor is best described as an unpredictably thrilling job.
