A certified internal auditor® works in the audit department of a corporation. An internal auditor is concerned with internal operations, while an outside auditor is concerned about another business's financial operations. A person becomes a certified internal auditor® (CIA®) by passing an exam, sponsored by the Institute of Internal Auditors. Becoming certified confers professionalism and credibility in an industry that is largely unregulated in most places.
The internal audit function is separate from the accounting department, providing independence to auditors when they work on their tasks. A tenet of any type of audit is that a person cannot audit his or her own work, and based on that premise, internal auditors do not perform any accounting or management functions. They review existing financial and management operations looking for weaknesses in internal controls, problems with effectiveness or efficiency in processes, and issues with reliability of financial information.
A certified internal auditor® follows an audit program to make sure he or she covers all salient aspects of an audit. An audit program is a listing of items and sometimes questions that must be reviewed and answered to meet the audit objective. Often, audit managers create or review audit programs to make sure that people are staying on task. Audit managers usually hold credentials such as CIAs or Certified Public Accountants (CPAs).
Interviewing employees is part of the job of a certified internal auditor®, along with reviewing transactions to make sure that processes and procedures are being followed. For example, an internal auditor looks for signatures when reviewing invoices paid to make sure the purchase was properly authorized. An internal audit job may involve investigating fraud or an unusual situation. It can be very broad in scope.
An audit team may release reports commenting on findings and making recommendations to management. The reports are confidential, describing in detail any issues encountered, their impact, and recommendations to correct the problems. After the audit team presents the findings in the report, the next step is for management to sign off on the reports, agreeing or not with the findings and recommendations.
Internal auditors are found in large corporations, and are an intrinsic part of management. Their work is broad in scope, and the work can be very interesting. Traveling is usually part of the internal auditor life, and often the travel is outside the US. Many internal auditors decide to be credentialed as certified internal auditors® to improve their credibility and professionalism.