Internal auditors need a blend of technical skills like risk assessment, data analytics, and knowledge of frameworks (IIA, COSO) combined with soft skills such as critical thinking, strong communication, and ethical integrity. Key abilities include identifying controls, auditing technology (AI/data analytics), and presenting complex findings to stakeholders.
Essential Internal Audit Skills
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.
Let's review some of the necessary skills of an auditor.
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.
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.
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.
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.
If you are good at: developing relationships remotely, anticipating how your organization can and should use technology advancements, understanding the business, leveraging root cause thinking, strategically mapping out your professional development, being a source of intel for your CAE, and being a likeable person, ...
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.
Internal auditing examines and assesses company records, workflows, systems, and financial documents. Through the internal audit function, teams identify compliance concerns, complete risk assessments, investigate fraud, and uncover data inaccuracies in financial reporting.
Internal auditors often face challenging situations when dealing with difficult clients or complex audit projects. To ensure they remain professional and balanced, they can use various tools and strategies to manage their stress and protect their mental health.
Which Academic Qualifications Are Required for an Internal Auditor? Internal auditors generally have a bachelor's degree in accounting or finance. Other degrees in fields such as business, economics, or mathematics may also be possible.
What are the qualities of a good auditor?
Objectivity is the cornerstone of the internal audit golden rule. Auditors must approach their work without bias, ensuring their evaluations are fair, impartial, and based solely on evidence.
The four positive attributes required for an internal auditor—analytical skills, attention to detail, ethical integrity, and effective communication—form the foundation of successful auditing practices.
The checklist for Internal Audit
The Big 4 are the largest accounting and auditing firms in the world: Deloitte LLP (Deloitte), PricewaterhouseCoopers (PwC), Ernst & Young (EY) and Klynveld Peat Marwick Goerdeler (KPMG).
ACL Analytics (Galvanize, now part of Diligent) is one of the most popular tools. It is specifically designed for audit professionals and enables users to analyse 100% of the data, identify patterns, anomalies, and issues in financial and operational data.
The Audit Bureau of Circulations (ABC) of India is a non-profit circulation-audit organisation. It certifies and audits the circulations of major publications, including newspapers and magazines in India.
The COSO internal control framework identified five interrelated components:
The four common types of auditors are Internal Auditors (evaluate company operations for management), External Auditors (independent review of financial statements for outside parties), Government Auditors (ensure compliance with laws for public agencies like the IRS), and Forensic Auditors (investigate financial fraud for legal proceedings). These roles focus on different areas, from internal controls and risk management to financial reporting accuracy and fraud detection.
One of the FRC's concerns is that firms' do not maintain a consistently high standard of auditing. Whilst excellent work is performed by many, some in the same firm fall short of expectations. The engagement quality control (“EQC”) review process should ensure consistently high quality.