The top five essential skills for an internal auditor are communication, critical thinking/analytical skills, risk management knowledge, data analytics proficiency, and adaptability. These skills enable auditors to identify risks, analyze complex data, and effectively communicate findings to stakeholders.
Essential Internal Audit Skills
The “5 P's of Internal Audit” includes 5 video-clips presenting testimonials from audit managers on the topics of Plan, Perform, People, Profile and Product.
Internal auditors also need skills like communication, problem-solving, industry knowledge, and organization to be effective now and in the future. Audits can focus on either controls and compliance or identifying risks.
A successful internal audit function relies on four fundamental pillars, often referred to as the “4 C's”: Competence, Confidentiality, Communication, and Collaboration. These principles guide auditors in delivering meaningful and impactful results. Let's explore each of these elements in detail.
Most organizations consider critical thinking an indispensable skill for internal auditors. Critical thinking skills lead to improved decision-making and can result in better organizational performance.
The Global Internal Audit Standards are organized into five domains: Purpose of Internal Auditing, Ethics and Professionalism, Governing the Internal Audit Function, Managing the Internal Audit Function, and Performing Internal Audit Services.
The COSO internal control framework identified five interrelated components:
The principles of independence, objectivity, competence, confidentiality, professionalism, due professional care, and continuous improvement are essential for the internal audit function to fulfill its role as a trusted advisor to the organization.
Big Five
The Global Internal Audit standards are organized into five domains including Purpose of Internal Auditing; Ethics and Professionalism; Governing the Internal Audit Function; Managing the Internal Audit Function; and Performing Internal Audit Services.
5S is a five-step methodology that creates a more organized and productive workspace. In English, the 5S's are: Sort, Straighten, Shine, Standardize, and Sustain. 5S serves as a foundation for deploying more advanced lean production tools and processes.
The 7 E's in operational auditing are Effectiveness, Efficiency, Economy, Excellence, Ethics, Equity, and Ecology, forming a comprehensive framework for internal auditors to assess an organization's success beyond mere compliance, focusing on goal achievement, resource optimization, quality, moral conduct, fair treatment, and environmental impact to add significant value.
12 Valuable Financial Auditor Skills
What happens during an audit? Internal audit conducts assurance audits through a five-phase process which includes selection, planning, conducting fieldwork, reporting results, and following up on corrective action plans.
Basic Principles of Auditing
An Internal Finance Control (IFC) audit checklist is an invaluable tool for comparing a business's practices and processes to the requirements set out by ISO standards.
An internal auditor's role usually includes reviewing processes and procedures, examining financial records, assessing compliance with applicable laws and regulations, evaluating risks and developing recommendations to improve risk management, and investigating fraud.
There are five elements to every finding — the 5 C's: condition, criteria, cause, consequence, and corrective action.
Current best practices, such as the 5 Cs framework (Criteria, Condition, Cause, Consequence, and Corrective Action), ensure that audits provide actionable insights rather than simple observations.
It is important that you are clear about the skills, knowledge, and behaviors you need to be successful, not just now but into the future as well. These skills should include agile audit, data analysis, continuous risk assessment, and communications and stakeholder engagement.
Head of internal audit ($300K)
Internal auditing professionals can see robust salaries across all stages, with an internal auditor typically earning $110K and an internal audit manager seeing $170K on average.
Internal Employees: As per Rule 13, Companies (Accounts) Rules, 2014, Companies can appoint a qualified employee with relevant experience to serve as the internal auditor. Statutory Auditor: A statutory auditor cannot be an internal auditor as per Section 144(b) of the Corporations Act 2013.