What is the Role of an Internal Auditor and How Much Do They Earn?

Internal auditors are critical for organizational integrity, with salaries ranging from $50,000 for entry-level roles to over $130,000 for experienced professionals. Their core function is to provide independent assurance that a company's risk management, governance, and internal control processes are operating effectively, directly impacting financial health and compliance.

What does an internal auditor do?

An internal auditor acts as an independent, objective advisor to an organization. Unlike external auditors who report to shareholders, internal auditors report directly to senior management and the board's audit committee. Their primary goal is to improve an organization's operations through a systematic, disciplined approach to evaluating and enhancing the effectiveness of risk management, control, and governance processes. Based on our assessment experience, their day-to-day responsibilities typically include:

• Conducting Risk Assessments: They identify and evaluate significant business risks, from financial inaccuracies to operational inefficiencies and compliance failures.
• Performing Audit Procedures: This involves testing and evaluating evidence to ensure controls are working as intended. This is a core part of the internal control framework—the policies and procedures a company uses to achieve its objectives.
• Preparing Detailed Reports: Auditors document their findings, highlighting areas of concern and providing actionable recommendations for improvement.
• Providing Objective Advice: They counsel management on how to streamline processes, mitigate risks, and ensure compliance with ever-changing laws and regulations.
• Maintaining Impartiality: A key tenet of the role is objectivity. Internal auditors must assess each department without bias, even when reviewing the work of colleagues.

How much does an internal auditor make?

Compensation for internal auditors is highly dependent on experience, industry, location, and professional certifications like the Certified Internal Auditor (CIA) designation. According to data adapted from sources like ok.com, the typical salary range in the United States is as follows:

What skills are required to become an internal auditor?

Success in this field requires a blend of technical expertise and strong interpersonal abilities. The most critical skills include:

• Analytical and Critical Thinking: The ability to dissect complex processes, identify inconsistencies, and understand the root cause of issues is paramount.
• Attention to Detail: Auditors must meticulously review documents and data to spot errors or control weaknesses that others might miss.
• Communication Skills: Perhaps the most underrated skill, auditors must write clear, concise reports and effectively communicate findings—both positive and negative—to management. This ensures their recommendations are understood and acted upon.
• Data Analytics Proficiency: Modern auditors use specialized software to analyze large datasets, making technical skills in data interrogation and visualization increasingly valuable.

What is the difference between an internal and external auditor?

While both provide assurance, their focus and reporting lines differ significantly. An internal auditor is an employee focused on improving internal processes for management. An external auditor, typically from a public accounting firm, is hired to provide an opinion on whether the company's financial statements are presented fairly, reporting primarily to shareholders. Internal audit is continuous and advisory, while external audit is typically an annual, legally required exercise.

In summary, a career as an internal auditor offers a unique blend of technical challenge and strategic influence. Key takeaways for aspiring auditors are to pursue relevant certifications like the CIA, develop strong communication skills to articulate findings effectively, and gain a broad understanding of business operations to provide the most value. This role is a proven pathway to senior leadership positions in finance, risk, and compliance.