Transitioning to an Internal Auditor Role: Tips for External Auditors and Accountants

For professionals who are passionate about maintaining financial integrity and ensuring the smooth running of an organization's operations, transitioning from an external auditor or an accountant in a commercial setting to an internal auditor is a commendable career move. This transition requires a blend of technical skills, ethical standards, and a deep understanding of the company's internal operations. Here’s a detailed guide on how to make this change successfully.

Understanding the Roles

Before making the transition, it is crucial to understand the roles that an external auditor and an internal auditor play. External auditors provide an independent opinion on a company's financial statements, helping investors and stakeholders gain confidence in the accuracy and fairness of financial reports. On the other hand, internal auditors are employees of the company, and their role includes evaluating the effectiveness of internal control systems, assessing risk management practices, and ensuring compliance with laws and regulations.

Why Consider an Internal Audit Role?

There are several compelling reasons to consider transitioning to an internal auditor role. Firstly, internal auditors have a significant impact within the company, directly contributing to the organization's success. They help improve risk management, identify potential issues early, and enhance the overall operational efficiency. Additionally, the role offers a more intimate understanding of the company's operations and financials, providing an enhanced sense of personal satisfaction in making a direct impact.

Career Path from External Auditor to Internal Auditor

The journey from an external auditor to an internal auditor is not straightforward but highly rewarding. Here are the essential steps to blazing your trail:

Gain Experience in the External Audit Environment: If you are currently a junior or senior external auditor, focus on acquiring a robust understanding of the audit process, risk assessment, and detailed financial analysis. This experience is invaluable as it provides a strong foundation for internal auditing. Learn Company Specifics: Once you decide to transition, seek internal positions within the company that will allow you to familiarize yourself with the company's structure, operations, and internal control processes. Develop Internal Auditing Skills: Acquire specific internal audit skills by taking relevant courses, obtaining certifications such as the Certified Internal Auditor (CIA) or Certified Internally Audited (CIA) designation, and continuously updating your knowledge base regarding internal control frameworks, risk management, and regulatory compliance. Network and Communicate: Networking with current internal auditors can provide invaluable insider insights and guidance. Engage in conversations with financial managers and other relevant stakeholders to understand their perspectives and needs, which will help you navigate the transition more smoothly. Prepare for the Interview: Highlight your external auditing experience, emphasizing how it has prepared you for an internal auditing role. Showcase your ability to analyze and interpret complex financial data, and discuss your understanding of internal controls and risk management practices.

Challenges and Rewards of an Internal Auditor Role

The transition from an external auditor to an internal auditor presents unique challenges and offers substantial rewards. Some of the most common challenges include:

Rebuilding Trust: As an internal auditor, you are representing the company’s interests, which can be a delicate balance, especially if you previously worked with external auditors. Dealing with Bias: Overcoming any personal or professional bias is crucial to maintaining objectivity. Understanding Organizational Culture: Gaining a deep understanding of the company's culture, policies, and procedures is essential for effective internal auditing.

On the other hand, the rewards are equally significant. You will have the opportunity to:

Contribute to Strategic Decisions: Internal auditors are often involved in high-level discussions and can provide critical insights that influence strategic business decisions. Enhance Professional Growth: This role exposes you to a wide range of responsibilities, including compliance, risk management, and performance improvement, all of which contribute to your professional development. Build Credibility: Your knowledge of the company's operations and internal controls will build credibility and enhance your influence within the organization.

Conclusion

Transitioning from an external auditor or accountant to an internal auditor is a significant step, but it offers unique opportunities for growth and meaningful impact within an organization. By gaining experience, developing relevant skills, and effectively addressing the challenges, you can navigate this career shift successfully and contribute to the success of your company.