Rise to Your Internal Audit Career Potential

Internal Audit Career Potential

The IIA’s 2016 Career Guide

Rise to Your Internal Audit Career Potential

The recognition of internal audit’s value continues to increase, as evidenced by findings in The IIA’s Audit Executive Center’s 2015 North American Pulse of Internal Audit Report:

Navigating an Increasingly Volatile Risk Environment (2015 Pulse Report). Forty-two per- cent of survey respondents expected their budgets to increase in 2015 and 29 percent projected staff level increases. In fact, 29 percent said they anticipated their budgets to increase by 15 percent or more.

Whether you pursue a lifelong internal audit career or spend limited time in the profession to strengthen key skill sets, IIA President and CEO Richard Chambers, CIA, QIAL, CGAP, CCSA, CRMA, says your time will be well spent. According to Chambers, “Internal auditing has become one of the few professions with skill sets that are so transferrable to other business units within the organization that you can wait to decide your path until after you have some experience.”

With unemployment levels for the profession less than half the national average, it is a good time to be an internal auditor. However, as with any profession, internal audit faces its challenges. 2015 Pulse Report highlights both opportunities and challenges within the profession and is intended to help practitioners use this information to best position themselves for career success.

2012

2022 – 1,442,200 Accountants & Auditors

13 %

Increase

} {

Source: 2015 U.S. Bureau of Labor Statistics, Employment Projections Program

TALENT DEMANDS

Turning Challenge Into Opportunity

The advancement in technology and speed of change over the last decade have expanded the risk landscape and changed both the composition of inter- nal audit work and the skills necessary to execute it. In a 2015 blog post, Cham- bers commented “The days of the inter- nal audit function being focused primar- ily on financial controls is but a distant memory. In fact, more than 80 percent of internal audit plans in 2015 will be dedicated to risks other than financial- related topics. And skill sets are evolving accordingly.”

Chambers also highlighted that for the first time in more than a decade, there is mounting evidence of an emerging internal audit talent shortage. Compounded by the talent short- age is a growing skill gap. When asked to describe why they were experiencing skill gaps, of respondents to The IIA’s Audit Executive Center’s 2014 Pulse of the Profession survey:

■ 54% cited competition for a limited pool of skilled auditors as a concern.

■ 33% mentioned changes in the field making it difficult for auditors to stay current.

■ 28% cited insufficient compensation.

■ 25% mentioned lack of resources for skills development.

The question is, how do you become or continue to be the in-demand modern day internal auditor? According to Larry Harrington, CIA, QIAL, CRMA, CPA, The IIA’s 2015–16 global chairman of the board and vice president of internal audit for Raytheon Co. in Waltham, Mass, “Whether their organizations provide the resources or time to do so, internal auditors must be willing to invest their own time and money to achieve that goal.”

The importance of his chairman’s theme, “Invest in Yourself,” hits home when Harrington points out that globally, six in 10 audit departments’ training and development programs are poorly implemented. The 2015 Global Internal Audit Common Body of Knowledge Study

4 out of 10 internal auditors receive less than 40 hours of training per year.

–

Global Internal Audit CBOK Study

(CBOK) shows most internal auditors only invest 40 or fewer hours in training — the same as 10 years ago — with approximately four out of 10 reporting they receive less than 40 hours of training per year, three out of 10 reporting exactly 40 hours of training per year, and another three out of 10 exceeding 40 hours. Harrington provides his Raytheon auditing team with 200 hours of training annually and asks them to match that investment on their own.

The notion that if internal auditors want to be successful, this num- ber needs to increase is shared by Theresa Grafenstine, inspec- tor general, U.S. House of Representatives, Washington, DC. She made her perspective clear in the CBOK Report, Driving Success in a Changing World: 10 Imperatives for Internal Audit, saying “Forty hours of development per year is okay if you are comfortable with mediocrity, but to be successful, you have to put in the extra time.”

Smart Investing

While it’s clear the time practitioners need to invest in professional training and develop- ment needs to increase exponentially, the question becomes where to invest that time?

To answer the question, practitioners need to understand stakeholders’ needs so they can attain or sharpen the skills necessary to meet those needs. According to KMPG Interna- tional’s Global Audit Committee Survey, 2014, the top areas that stakeholders would like internal audit to devote more time to are risk management processes (62 percent), IT and data management (58 percent), operational risks (52 percent), and compliance and regula-

39 ^% 28 ^% 33 ^%

12

3

6 9

12

3

6 9

12

3

6 9

Less than 40 hours Exactly 40 hours Exceeds 40 hours

Source: 2015 Global Internal Audit CBOK Survey

Number of Hours Internal Auditors Invest in Training Annually

“Forty hours of development per year is okay if you are comfortable with mediocrity, but to be successful, you have to put in the extra time.”

– Theresa Grafenstine, inspector general, U.S. House of Representatives

Respondents to the survey acknowledged the evolution of internal audit, with more than 80 percent indicating that internal audit’s role should extend beyond the adequacy of financial reporting and controls to include key risks, especially escalating threats such as IT and data management. However, only 50 percent of respondents indicated their internal audit team currently has the skills and resources to be effective in this role.

Chief audit executives (CAEs) are working diligently to ensure they are staffing and develop- ing their teams to meet the challenge. But the top five areas where they have faced hiring challenges and identified gaps in their current team’s skill levels, according to the 2015 Pulse Report, include:

AREAS OF HIRING DIFFICULTY

RANK SKILL

1 IT–General

2 Cybersecurity & Privacy

3 Data Mining & Analytics

4 Industry-specific Knowledge

5 Analytical/Critical Thinking

AREAS OF SKILL DEFICIENCIES

RANK SKILL

1 Quality Controls (e.g. Six Sigma)

2 Data Mining & Analytics

3 Cybersecurity & Privacy

4 Forensics & Investigations

45 ^%

Compliance &

Regulation

52 ^%

Operational Risks

58 ^% 62 ^%

Risk Management Processes IT & Data

Management

Stakeholder’s Top Areas for Increased Internal Audit Focus

Source: KMPG International’s Global Audit Committee Survey, 2014

Top 4 Most Recruited Skills by CAEs

While CAEs continue to face challenges in acquiring and developing staff with certain skill sets, according to the 2015 Pulse Report, there are keys areas where they are not willing to compromise. The skills that consistently rose to the top in terms of being essential for inter- nal auditors to possess affirm an assertion Harrington has been quoted as saying for years,

“soft skills are the new hard skills.” However, there is a growing concern among leadership that soft skills are more difficult to teach on the job, reinforcing the notion that practitioners need to take a proactive approach to strengthening these skills outside the office.

TOP SKILLS SOUGHT AFTER FOR NEW

INTERNAL AUDITORS

Analytical/Critical Thinking

Business Acumen

Industry Specific Knowledge

To help internal auditors strengthen these highly sought after skills, and attain a big picture view of their current skills levels in all areas, The IIA has created a free tool for its members, IIA Career Map™. This online application allows practitioners to self-assess their skills against a global internal audit competency framework created by The IIA that is tied to vari- ous internal audit positions. After the self-assessment is complete, IIA Career Map creates a gap analysis and a personalized learning plan to help users get to the next level.

Ensure You’re 4 for 4

Analytical/Critical Thinking TOP SKILLS SOUGHT AFTER FOR NEW

INTERNAL AUDITORS

Analytical/Critical Thinking

Business Acumen

Industry Specific Knowledge

96 ^%

of CAEs Highly Value This Expertise

The ability to break down information, evaluate it, and understand how one component af- fects another is invaluable. Combine that skill with the ability to examine assumptions, dis- cern hidden values, evaluate evidence, and draw conclusions and it creates a powerful force that provides a framework for solutions. It explains why analytical and critical thinking was the top-ranked skill CAEs valued. These skills were considered to be extremely essential by more than 62 percent of 2015 Pulse Report respondents, with another 34 percent consid- ering them to be very essential — meaning 96 percent of CAEs highly value this expertise.

These skills roll up into the bigger picture of the role internal audit can ultimately play within the organization. As board and audit committee member, Marty Coyne, stated in the Audit Channel TV video As Audit Evolves, So Must We, “Looking out three to five years, in- ternal audit will start to begin to be able to say ‘based on the following, here are the things that we need to be thinking about.’ So from an audit committee standpoint, they help frame some of the agendas. And from an external audit standpoint, I actually think they’ll have a significant impact on the external auditors — what they are actually auditing, what the subject matter is, and what the scope of the audit is.”

Through tapping into the power of the IIA Career Map tool, users can see what analytical and critical thinking course work is appropriate to pursue based on current skill levels. Some options include:

■ Critical Thinking: An Essential Skill for Internal Audit Success

■ Analyzing and Improving Business Processes

■ The Effective Auditor: Understanding and Applying Emotional Intelligence

■ Lean Six Sigma Tools for Internal Audit

Communication

TOP SKILLS SOUGHT AFTER FOR NEW

INTERNAL AUDITORS

Skills Communication

Analytical/Critical Thinking

Business Acumen

Industry Specific Knowledge

96 ^%

of CAEs Highly Value This Expertise

Nothing gets done without communication, which is why it was ranked so highly by CAEs, with 56 percent of 2015 Pulse Report respondents describing it as extremely essential and another 40 percent considering it very essential (96 percent combined). CAEs are looking for practitioners who can not only analyze information, but develop clear messages to com- municate their findings. Internal audit functions must have the skills to provide the level of detail stakeholders need to make informed decisions, without bogging them down in ir- relevant minutiae, resulting in:

■ Well-organized, well-written, and user-friendly audit reports.

■ Dynamic and compelling presentations.

■ Regular, well-timed, and appropriate conversations.

It is a skill that comes into play frequently, with more than seven in 10 re- spondents citing that they periodically interview management to identify changes in the organization’s risk profile, with 38 percent describing their Communication skills use as very utilized and 33 percent as extensively utilized.

To enhance communications skills, internal auditors should pursue pro- fessional development opportunities such as The IIA’s courses Commu- nication Skills for Auditors and Audit Report Writing. These skills are vital for both gathering and delivering information. As Kwang Ho Sung, vice president and head of internal audit at a major South Korean bank, emphasized in a report issued from the 2015 CBOK Study, Driving Suc- cess in a Changing World, “Excellent communication skills and business knowledge are critical to internal auditors. If we find a potential control breakdown in a high-risk area, we need to be able to easily and accurately explain that to our clients in a way they understand.”

“Excellent communica- tion skills and business knowledge are critical to internal auditors. If we find a potential control breakdown in a high-risk area, we need to be able to easily and accurately explain that to our cli- ents in a way they under- stand.”

– Kwang Ho Sung, vice president and head of internal audit at a major South Korean bank

Business Acumen

TOP SKILLS SOUGHT AFTER FOR NEW

INTERNAL AUDITORS

Analytical/Critical Thinking

Business Acumen

Industry Specific Knowledge

80 ^%

of CAEs Highly Value This Expertise

According to PwC’s 2015 State of the Internal Audit Profession Report, the absence of strong business acumen skills within internal audit significantly hinders its ability to add value. In fact, among stakeholders who find little value in their internal audit functions, 70 percent say business acumen is one of the primary road blocks. It explains why busi- ness acumen skills garnered the number three spot in the 2015 Pulse Report’s list of most recruited skills. These skills were considered extremely essential by 30 percent of respon- dents and very essential by more than 50 percent (80 percent combined).

If internal audit is to successfully shift focus from primarily financial-related topics and offer proactive insights on all business risks, business acumen skills are critical. As Abdul- rahman al Harthy, chief audit executive, Oman Oil Group, explains in PwC’s report, “The main area of challenge is not technical but behavioral: finding auditors with sufficient global and business acumen who can face management and provide appropriate and constructive levels of challenge.”

However, the same report offered a cautionary and challenging comment by Ninette Ca- ruso, chief audit executive, Genworth Financial. “If internal audit says it is going to ‘learn business acumen,’ it will fail,” says Caruso. “Internal audit needs people who will train themselves by digging into the details, and that starts with intellectual curiosity. Intellectual curiosity is key.”

This speaks to Harrington’s assertion that practitioners must take personal responsibility for their professional development. Combining the drive it takes to train themselves by digging into the details with courses that can offer direction on business acumen, such as The IIA’s courses Creative Problem Solving Techniques for Internal Auditors and Essential Skills for Today’s Internal Auditor, as well as those suggested through IIA Career Map, can prove to be an effective formula.

Industry-Specific Knowledge TOP SKILLS SOUGHT AFTER FOR NEW

INTERNAL AUDITORS

Analytical/Critical Thinking

Business Acumen

Industry Specific Knowledge

69 ^%

of CAEs Highly Value This Expertise

According to the The IIA’s Global Internal Audit Common Body of Knowledge (CBOK) Study, Driving Success in a Changing World: 10 Imperatives for Internal Audit, only 53 percent of respondents incorporate training for internal audit that addresses business knowledge re- lated to the industry and organization. However, a total of 69 percent of respondents to the 2015 Pulse Report considered industry-specific knowledge, the fourth-ranked category, to be either very or extremely essential (46 percent and 23 percent respectively).

While there are core competencies that all internal auditors should possess, applying those skill sets to the health care industry and the fashion industry are two vastly different endeav- ors. To be taken seriously and have both their skills and insights valued within the organiza- tion, internal auditors must understand the driving factors, nuances, and unique challenges of the specific industry in which they operate.

However, even within a given industry, any given sector of that industry can demand different skills sets and industry knowl- edge. For instance, Barclay Simpson’s Compensation and Market Trends 2015, Internal Audit Report stated “Investment banks have sought candidates with good capital markets products ex- posure or experience of auditing front-office trading desks; while consumer banks have seen demand rise for candidates with strong model risk, treasury and liquidity understanding as they respond to CCAR/DFAST regulations.”

Internal auditors must

understand the driving

factors, nuances, and

unique challenges of

the specific industry in

which they operate.

5 Strategies to Land Your Next Position

1. Put it in Writing

Develop a Vision Statement

Before you can chart a career path, you have to know where you want to go. Developing a vision statement of where you see yourself in the next three to five years, and committing it to paper, gives you a clearer sight line to your goals. Support your vision statement with specific accomplishments to use as measurements, which could include:

Create a Professional Development Plan

With your vision statement in hand, create a professional development plan to arm yourself with the skill sets and experience you need to get there. Although most people believe they need more training, most do not view it as their personal responsibility to make sure they get it. A July 2015 article, Skills Gap, Turn Over Are Top Talent Concerns, published by The Society of Human Resource Management (SHRM), found that of workers surveyed:

76 ^% 33 31 ^{% %}

placed the responsibility for providing a clear career development path on their employer.

rated their organization’s training and career development opportunities as excellent or good.

didn’t feel they had been trained adequately by their employer.

Areas of expertise I want to

explore.

Industries/ types of organizations I might excel in.

Titles I would

like to hold. Would I consider

relocating for a job?

What are my salary and benefit

expectations?

CEO

MY DEVELOPMENT PLAN

With those numbers, simply taking personal responsibility for develop- ing your career path will give you an edge on the competition. The good news is, gone are the days where this has to be a manual process. Us- ing free, online tools such as IIA Career Map can do the gap analysis and course planning portion for you. All that is left is for you to follow through on the training, update your personalized learning plan, and continuing to pursue your independent learning.

Document Your Accomplishments

This can become an overwhelming task if you do not keep on top of it.

As time passes, it is harder to recall specific project details. Build it into your regular routine by putting a weekly reminder on your calendar to jot down three specific and tangible things you accomplished during

the week. Keeping an accurate and comprehensive log of your accomplishments positions you to:

■ Gauge your current bandwidth.

■ Prepare for performance reviews.

■ Quickly and easily update your resume.

2. Use Your Network as Your Personal World Wide Web

Identify the Threads of the Spider’s Web

Most people know the importance of having a strong network, but many people do not see all of the various threads that connect and intertwine to build its strength. Think of it as a spider’s web in that there are countless threads comprising it, and one thread leads to another. Some of the threads might include:

■ Coworkers past and present, inside and outside your department.

■ Members of professional organizations such as The IIA.

■ Alumni groups, community interest organizations, clubs, and hobbies.

■ Past and present mentors, from inside or outside your organization.

■ Professional online communities including LinkedIn, Twitter, and Facebook.

How many people do you think are in your network? A June 2015 article in CareerCast, The Underestimated Importance of Personal Networking, cited that according to the Pew

76 percent place the responsibility for providing a clear career development path on their employer.

– Source: July 2015 article, Skills Gap, Turn Over Are Top Talent Concerns, pub- lished by The Society of Human Resource Management (SHRM)

Research Center, the average American has approximately 634 contacts. Additionally, the August 2014 article, Professional Social Networks: What’s Average, and How Can You In- crease Yours?, published by Keir Educational Resources, asserts that 490 connections is the median for LinkedIn, 229 friends is the median for Facebook, and 130 followers is the median for Twitter users.

This might create the impression that numbers are king in terms of network strength, but it’s important to remember that the quality of the connection and the maintenance of the rela- tionship are what ultimately makes that connection valuable. If you never connect in person with these so-called contacts, recommend them for a particular skill, post a status, or tweet a 140-character thought — and as a result have a meaningful exchange with someone in your network — your numbers might as well be at zero across the board.

490 Median Connections for Users

229 Median Friends for Users

130 Median Followers for Users

Source - Pew Research Center

YOUR SOCIAL MEDIA NETWORKING TOOLS

Strengthen Your Web

Once you have recognized all the threads of possible connections you can make with your web, you have to maintain each thread’s strength. This requires regularly checking in with the members of your network, whether it’s through quick emails and texts, social media posts, or in-person meetings. While small talk and casually chatting are inevitable, to ef- fectively leverage each relationship in your network you must:

■ Educate each contact about your experience, skills, and aspirations.

■ Show sincere interest in their experience, skills, and aspirations.

■ Ask for advice, a referral, or a recommendation and be willing to give the same in return.

Leverage One of Your Strongest Threads

A mentor can be a tremendous source of support and one of your greatest advocates, mak- ing them an integral part of your network. If your organization has a formal mentor program, enter the program or gain sponsorship. If not, think of another way to engage the wisdom of a mentor. Perhaps someone from a professional association, another company, a different industry, a trusted friend’s recommendation, and even a different discipline. The important thing is that you trust and respect your mentor’s advice and perspective. Mentors can serve different purposes including:

■ A source for expert advice in one particular area.

■ A sounding board who can offer more general advice.

■ An advocate within the organization who can increase your profile.

3. Develop and Emphasize Your Soft Skills

In Protiviti’s 2014 Internal Audit Capabilities and Needs Survey, respondents were asked to assess their competency in 19 areas of personal skills and capabilities. The top issues that surfaced as needing the most improvement were:

■ Presenting (Public speaking).

■ Negotiation.

■ TIE: Persuasion; Mastering new technology/applications.

■ TIE: Dealing with confrontation; Time management.

■ TIE: Developing other board committee relationships; Developing outside con- tacts/networks.

Given that of the top eight skills needing improvement, six were soft skills, it becomes clear there is much room for improvement, but also tremendous opportunity for those who de- velop and emphasize their strengths in this increasingly valued area. Not only will enhancing your soft skills allow you more effectively serve stakeholders, it will ultimately allow you to more effectively advocate for yourself and advance your career by positioning you to:

■ Take an active role in status meetings and performance reviews.

■ Be the first to come to mind for engaging new projects.

■ Have the confidence to go after a promotion or new position.

It should come as no surprise that strong soft skills build rapport with stakeholders and enhance an internal auditor’s credibility. As Nicola Rimmer, director in Barclay’s Internal Audit (London) and past president of The IIA–UK & Ireland, surmises in the 2015 CBOK Report, Driving Success in a Changing World, “You need credibility if you want people to come to you for advice and information.” She said part of building credibility involves being able to speak to people about what really matters to them without turning every inquiry into an audit request.

4. Study the Organization’s Strategic Plan

The 2015 CBOK Report, Driving Success in a Changing World, cites that 57 percent of re- spondents to the CBOK practitioner survey say the internal audit department is either fully aligned or almost fully aligned with the strategic plan of their business. That might sound good, but it means a whopping 43 percent could not say this with confidence. If you fail to understand your organization’s overarching goals and their strategy for realizing them, how can you possibly know how your responsibilities fit into the equation?

Archie Thomas, a consulting internal auditor in Toronto, Ontario, and the former CAE of a large mining company, serves on Quality Assessment (QA) teams for The IIA. He says one of the most common complaints in QAs conducted around the world is that internal auditors don’t understand the business. “If you understand an organization’s strategy and how it cascades down through the organization’s objec- tives — and you use that in your risk management and audit planning — you’ll start to talk more like management,” says Thomas. “They will start to recognize … that you are starting to understand their business. You’ll find that respect for internal audit will go up, your brand will look better, and you will be able to accomplish a lot more related to helping your organization achieve its objectives.”

ORGANIZATIONAL STRATEGIC PLAN

ACME Industries Strategic Plan

Strategic Planning Prepare for

the Future Bugeting and Resource Allocation

Develop Unit Plans Implement Plans Consider Revisions Put Initiatives

into Action Assess Impact

of Initiatives Measure Results

Indentify Needs and How to Meet

Needs to Fulfill Objectives

43 percent say their internal audit department is not fully

aligned with the

organization’s

strategic plan.

5. Invest in Yourself

When reflecting on the The IIA’s 2015 Global Internal Audit Common Body of Knowledge (CBOK) Study: Driving Success in a Changing World: 10 Imperatives for Internal Audit report’s revelation that internal auditors say they spend 40 hours or less on training and professional development annually — unchanged from 10 years ago — IIA Global Chairman Larry Harrington’s shock is palpable. “Has the pace at which the world is changing really not altered since then?” asks Harrington. “Can anyone today remain indispensable to their organizations, their profession, or themselves with just 40 hours of training a year?”

His point is well taken. So how do you effectively invest in yourself? You begin by setting a training and development goal. Depending on your organization’s commitment to offering training development opportunities, you may or may not be able to attain the 400 hours annually that Harrington prescribes for his own staff. However, even doubling your personal commitment from 40 to 80 hours annually would be significant progress. To do this, make sure you recognize all the activities that count as training and development, such as:

■ Participating in training and education customized for you by IIA Career Map based on your input.

■ Volunteering for “stretch” projects above and beyond your current scope of responsibility.

■ Joining/heading a committee(s) in a professional organization for leadership development.

Source: 2015 Global Internal Audit CBOK Report, Driving Success in a Changing World

40

80

800 HOURS OF DEVELOPMENT MAY BE UNREALISTIC Going from 40 to 80 hours is a major

investment in opportunity and growth.

■ Reading research reports, books, and how-to articles on critical issues facing the profession and the industry in which you work or aspire to work.

■ Engaging in online forums and message boards on hot topics within the profession to exchange ideas with colleagues.

Harrington recommends viewing yourself as a brand. This approach can help you make smart investment decisions by questioning each opportunity using the standard of whether or not the opportunity supports the brand you want to project to stakeholders, colleagues, and your supervisor. If you apply this standard to every aspect of your brand, from what you wear and what you say (including what you post on social media) to the courses you take and the opportunities you pursue, you will position yourself to rise to your full internal audit career potential.

What you do

What you say

What you wear

opportunities What you pursue

YOUR PERSONAL BRAND IS:

BRAND

U

3 Compelling Reasons to Earn a Professional Internal Audit

Certification

According to Robert Half’s 2015 Salary Guide, depending on company size, in 2015 pro- jected salaries for internal auditors with one to three years of experience will range from

$57,500–$83,250 representing a nearly four percent increase over 2014, while senior internal auditors’ salaries and internal audit managers’ salaries will increase more than four percent ranging from $74,000–$126,250 and $87,500–$144,250 respectively. As expected, salaries increase with experience and responsibility. However, gaining enough experience to qualify for more senior and management positions can take years. In the meantime, consider increasing your earning potential by pursuing professional certification.

Once again, Robert Half’s 2015 Salary Guide cited The IIA’s Certified internal Auditor^® (CIA^®) as one of today’s in-demand certifications. The CIA exam is administered through a computer-based testing platform at more than 600 sites around the world throughout the year. In addition to the CIA, The IIA offers specialized credentials including:

■ Certification in Control Self-Assessment^® (CCSA^®)

■ Certified Financial Services Auditor^® (CFSA)

■ Certified Government Auditing Professional^® (CGAP^®)

■ Certification in Risk Management Assurance^® (CRMA^®)

■ Certified Professional Environmental Auditor^™ (CPEA^™)

■ Certified Process Safety Auditor^™ (CPSA^™) Projected Salaries for Internal Auditors*

57,500 - 83,250

1-3 Years Experience

74,000- 126,250

Sr. Internal Auditors

87,500- 144,250

Managers

Certified Professionals Earn More Money

While it makes sense that professionals who have more education and hold professional certifications make more money, the difference in percentage increases in salaries earned from holding a post-graduate degree and becoming certified is significant. According to The IIA’s Audit Executive Center’s 2015 Internal Audit Compensation Study, in the United States, the median salary for those with a master’s degree is 12 percent higher than those holding a bachelor’s degree only (11 percent higher in Canada). However, the median salary of internal auditors in the United States who hold one or more certifications is 33 percent higher than auditors with no certification (27 percent higher in Canada). When you factor in the difference in the time and expense of earning a master’s degree versus earning a profes- sional certification, the difference on the return on investment appears exponential.

The idea that professional certification increases earning potential was highlighted by Theresa Grafenstine, inspector general, U.S. House of Representatives, Washington, DC, in the CBOK report, Driving Success in a Changing World. “In my organization, if people invest in themselves and get additional certifications, it raises the professionalism of the internal audit group and we reward that with hard dollars,” says Grafenstine.

More Job Opportunities & More Certification Options

Potential employers are more likely to look twice at your resume if you have CIA or other letters behind your name. In some cases, not being certified can even eliminate you as a candidate for a position. “My firm requires a designated professional certification for all professionals at a manager level or above,” says Julie Lathrop, CIA, CPA, senior manager, advisory services at EY. “The majority of professionals in my practice are either CPAs, CIAs, or CISAs.”

Whether you are just embarking on your certification quest or looking to take it to the next level, The IIA now offers two new programs to help you on your journey.

Mapping Your Path for Growth

Professional development is a journey. Demonstrating your knowledge, acumen, and leader- ship ability are key elements to arriving at your destination. Earning a professional internal audit credential is a critical step toward demonstrating your knowledge of and strong com- mitment to the practice of internal auditing.

Wherever your journey takes you, there’s a credential along the development pathway to strengthen your knowledge base, deepen your competencies, and distinguish you among your peers.

■ Enhancing your skills and knowledge.

■ Helping you gain credibility and respect in the field.

■ Increasing your earning potential.

■ Demonstrating your understanding of and commitment to the practice of internal auditing.

Internal Audit Practitioner

The Internal Audit Practitioner is a new designation that allows you to quickly demonstrate your internal audit aptitude. You can earn this new designation by passing Part 1 of the CIA exam and completing the Internal Audit Practitioner application. Candidates who ap- ply and have successfully completed the CIA Part 1 exam within the past 24 months are also eligible for this designation. This is a great opportunity for guest auditors or those in rotational auditor roles.

Qualification in Internal Audit Leadership (QIAL)

The IIA has developed the Qualification in Internal Audit Leadership^® (QIAL^®) to support aspiring, new, and experienced audit leaders on their journey to be recognized among the next generation of visionaries and leaders for the profession. The QIAL will help drive your success by providing you with confidence and credibility in:

■ Internal Audit Leadership.

■ Organizational Leadership.

■ Ethical Leadership.

■ Innovation and Change Leadership.

“Smart business leaders surround themselves with those who can anticipate the effects of new tech- nologies, globalization, and geopolitical change on an organization’s op- erations and customers.

They seek individuals who can act as change agents and can help an organization thrive — not just survive — in this fast-paced environment.”

– Lawrence J. Harrington, CIA, QIAL, CRMA, Chairman of The IIA’s Global Board of Directors, 2015–16, Vice President–

Internal Audit, Raytheon Company

Certification Improves Fraud Deterrence and Misconduct

A recent study by The IIA Research Foundation found that certification has a positive impact on fraud deterrence and misconduct. As Urton Anderson, Ph.D., from the Von Allmen School of Accountancy at The University of Kentucky explains, “The study found that if you have a high quality internal audit department, you are going to have a turnabout in terms of fraud and misconduct. What’s most interesting about this is what factors contribute to the quality

… competency − measured by certification. It seems that audit departments with a higher percentage of auditors certified are better deterrents, more competent, and better able to provide protection to the organization.”

The quality of an internal audit department goes up with each individual who becomes certi- fied as those individuals are:

■ Demonstrating a personal commitment to excellence.

■ Gaining invaluable knowledge by going through the certification process.

■ Committing to a continuing education requirement to stay certified.

This explains why many employers consider bearing all or part of the expense of earning a professional certification, such as the CIA. “My firm reimburses for a preparation course and examination fees once you have obtained certification,” says Lathrop.

The impact that certification can have on the caliber of work produced is motivating some companies to build it into the very fiber of their in- ternal audit function. “My colleagues are preparing to take the exam as it corresponds to the career development plan within the internal audit charter,” says Jorge Badillo, CIA, CCSA, CGAP, CRMA, CISA, regional internal auditor for the Kinross Gold Corporation in Chile, who was the first in his native country of Ecuador to earn the CIA designation when it was introduced there in 2006.

“Audit departments with a higher percentage of auditors certified are better deterrents, more competent, and better able to provide protection to the organization.”

– Urton Anderson, Ph.D., Von Allmen School of Accountancy at The University of Kentucky

Bringing It All Together

Rising to your full internal audit career potential is a challenge and an opportunity. In the wake of pressure to keep pace with increasing demands and evolving expectations, focusing on professional development and career management can fall by the wayside. However, the most effective way to serve your organization is to gain the knowledge and self-awareness necessary to add value. Think of it as putting yourself in airplane mode — secure your oxy- gen mask before assisting others.

While this guide has covered several steps you can take to rise to your internal audit career potential, remember that any strategy takes times to formulate, implement, and refine. By acting on just one or two of the suggestions offered here, you are laying the foundation of a plan that will pay dividends for your long-term career success.

For more information about any of the professional development opportunities discussed in this guide, please visit www.theiia.org/goto/careercenter.

Join The IIA today at www.theiia.org/goto/join.