An Insight into Internal Auditing at Banks: Pros, Cons, and Career Advices

When it comes to the auditing field, understanding the nuances of internal auditing at banks is crucial for anyone looking to pursue a career in this domain. This article delves into the experience of internal auditing in banks, compares it with statutory auditing, and provides valuable advice for upcoming Chartered Accountants (CA) interns interested in internal audit.

Experience in Bank Internal Auditing

As a former internal auditor in PSUs (Public Sector Undertakings) banks, I participated in what is commonly referred to as concurrent auditing, which closely resembles internal auditing. The process involves conducting checks and reviews that ensure adherence to financial regulations and preventive measures.

One of the highlights of concurrent auditing is its broader scope of audit. It allows for a comprehensive review of processes and controls, ensuring there are no loopholes. This role is more empowering compared to a statutory auditor, as you have more time to classify Non-Performing Assets (NPAs). Additionally, concurrent auditors have the flexibility to check compliance with any banking laws or circulars, which are endless in number.

However, the financial compensation does not meet the expectations. Despite the responsibility and flexibility, the payment for qualified Chartered Accountants (CAs) is meager. Monthly remuneration struggles to exceed Rs. 25,000, which is a significant challenge for anyone looking to have a robust educational and professional foundation.

Comparison with Statutory Auditing

Statutory auditing is different from internal auditing in its scope and responsibilities. While internal auditing focuses on preventive measures and continuous monitoring, statutory auditing is more about compliance and reports. The statutory auditor's role is more procedural and less interactive with the ongoing operations.

Internal auditors have a more hands-on approach, working closely with various departments to improve processes and systems. Statutory auditors, on the other hand, focus on the documentation and reports, ensuring they meet the specified standards and regulations.

The power dynamics are also different. Statutory auditors often communicate their findings to external stakeholders and regulatory agencies, whereas internal auditors work internally to ensure better governance and control.

Advice for CA Interns

For CA interns planning to intern in internal audit, it's essential to consider a firm that specializes in Ind AS and taxation. These areas will not only aid in your professional development but also provide a solid foundation for clearing your articleship exams.

Additionally, here are a few suggestions:

Educational Background: Ensure you have a strong educational background in accounting and finance. This will enable you to understand complex financial transactions and audit processes effectively. Technical Skills: Develop proficiency in using accounting software and other tools used in audits, such as Excel, Audytics, and other data analysis tools. Networking: Build relationships with experienced auditors and senior professionals in the field. Networking can open doors to mentorship and career opportunities. Stay Updated: Keep yourself updated with the latest auditing standards and changes in banking regulations. This will make you a more valuable asset to any firm.

For those interested in a career in internal audit, it's vital to remember that auditing is not just about identifying issues but also about improving processes and systems. A continuous learning mindset and a willingness to adapt to changes in the industry are key.

In conclusion, internal auditing provides a unique combination of challenges and opportunities. While it may not always be the most lucrative field, it offers a chance to make a significant impact on the organization's overall financial health and compliance. For CA students, prioritizing firms that specialize in Ind AS and taxation can set you on the right path to a rewarding career in internal auditing.