Certified Internal Auditor - Explained
What is a Certified Internal Auditor?
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Table of ContentsWhat is a Certified Internal Auditor?What does a Certified Internal Auditor Do? Academic Research on Certified Internal Auditor (CIA)
What is a Certified Internal Auditor?
A certified internal auditor is employed by a company or the government to review the financial records of that company or the government before an external auditor comes in. CIAs receive special certifications conferred by IIA (Institute of Internal Auditor); this certification allows auditors to work anywhere in the world.
What does a Certified Internal Auditor Do?
A Certified Internal Auditor is familiar with government agencies and financial institutions and corporations. An auditor with this certification audits financial records of the employer to ensure there are no gaps or details that cannot be explained. Just like CIAs, certified public accountants, CPAs, can perform auditing as they have the skills. However, a CIA is trained to specifically review financial records. The main difference between CPAs and CIAs is that while CPA is a credential only recognized in the US, the CIA is internationally recognized. Companies can employ CPAs as external auditors but CIAs are more skilled to handle internal audits. Sometimes, an accountant can hold both CPA and CIA certifications. To get CIA certification, an accountant will need to have a bachelor's degree and at least two years of work experience in a related field such as quality and compliance assurance or internal control. To be certified, the accountant has to go through 100 and 150 hours of study and afterward submit a letter that affirms their character. After certification, an accountant will be required to engage in 40 hours of continuing education every year to maintain certification. Certified Internal Auditors can work in an executive position such as chief audit executive or they can specialize and work as compliance auditors, internal auditors or audit managers. They can also work in investigations and information technology auditing. CIAs earn slightly lower salaries than CPAs, but it depends on the position the CIA or CPA holds and the employer. CPAs earn a median pay of $62,123 while CIA earns $59,677 in the US. A code of ethics governs internal Auditing. In 2008, for example, the Lehman Brothers were caught up in a scandal where executives received high salaries despite the financial hurdles the company was experiencing. Again, inadequate internal controls enhanced manipulation of the accounting systems and fabricating of numbers on the balance sheets. The actions were termed as illegal, biased and unethical. Internal auditing aims at detecting fraud and assessing internal control. Auditing methods migrated from England to the US during the industrial revolution. By the 20th century, auditing methods were standardized. IIA was launched in 1941 after which internal audit was viewed as a profession. In 1960, Congress stated that executive agencies should have internal audits in the internal controls system. When the Foreign Corrupt Practices Act was passed in 1977, it overhauled internal auditing as it prevented companies from conducting bribery and hiding of funds. The hiring of auditors was projected to increase by 11 percent between 2014 and 2024. The growth is attributed to legislation in financial reporting, mergers, acquisitions, corporate taxes, a need for increased accountability and the changes in the roles of auditors. Government agencies and corporates will always hire auditors to keep their internal controls intact.