Key Competencies for Internal Auditors
Definition
Internal auditors work in many organizations in the public and private sectors. They can either be trained
while working or will possess an internal audit or accountancy qualification before applying for an internal
audit position. However, other qualifications can also be useful as the work is varied, challenging, and draws
on a broad range of skills.
However, there is a range of key competencies that are required if internal auditors are to carry out their
function effectively. These will vary depending on the seniority of the auditor. The requirement in terms of
qualifications varies from country to country. In the United Kingdom, for example, an internal auditor is likely
to hold the Chartered Institute of Internal Auditors Diploma in Internal Audit Practice (PIIA) or equivalent.
Senior internal auditors should hold the Institute’s Advanced Diploma in Internal Auditing and Management
(MIIA) or equivalent.
According to the UK government, an internal auditor should have the following competencies.
• Understands the principles of the identification, assessment, and management of risk, including that
arising from the extended enterprise nature of organizations.
• Is able to identify and critically evaluate the elements of governance and risk management in an
organization.
• Is aware of and understands the organization’s risk management strategy.
• Understands the relationship of risk management to corporate governance.
• Is able to review and provide advice and recommendations on the implementation of the risk
management strategy.
• Understands the organization’s high-level objectives, how these are funded, and key related risks.
• Identifies and understands how operational objectives link into the higher-level objectives.
• Understands the relationship between internal audit and risk management, including the choice of roles
available to internal audit depending on the risk maturity of the organization and its possible impact on
corporate governance.
• Understands the specific risks related to operational activities and is able to contribute to the review of
risks in operational areas.
• Is able to relate the organization’s risk appetite to the appropriateness of controls and is able to
undertake reviews to assess their effectiveness and report to management accordingly.
• Understands the principles of performance measurement and output targets designed to deliver
objectives.
Advantages
• Possessing key competencies enables internal auditors to do their job effectively.
• Possession of these competencies helps internal audit staff to gain the confidence and respect of
senior management and of other staff they come into contact with. This is important if they are to carry
out their professional duties effectively.
Disadvantages
• Inevitably there will be costs involved in ensuring staff have the correct training and skills.
Action Checklist
• Ensure that your internal auditors have a continuing commitment to learning. Business and technology
are ever-changing, as are the political and regulatory environments in which a business operates.
• Before developing a training and development plan, ensure that training and development are linked to
the organization’s goals as well as those of personnel.
Dos and Don’ts
Do
• Assess the competency level of each internal auditor, identify the gaps that need remediation, and
develop an individual development plan for each internal auditor.
• Ensure that internal audit staff have an ability to manage projects and to work on their own initiative.
• Link the key competencies required by an internal auditor with your organization’s personal
development and appraisal systems.
• Ensure that internal audit staff have good written and verbal communication skills and are capable of
interacting with senior management.
Don’t
• Don’t forget to conduct a post-audit assessment, which should look at a variety of issues, including
scoring auditors against key competencies.
More Info
Books:
• IIA Research Foundation. Core Competencies for Today’s Internal Auditor. Altamonte Springs, FL: IIA
Research Foundation, 2010.
• Moeller, Robert R. Brink’s Modern Internal Auditing: A Common Body of Knowledge. 7th ed. Hoboken,
NJ: Wiley, 2009.
• Pickett, K. H. Spencer. The Internal Auditing Handbook. 3rd ed. Chichester, UK: Wiley, 2010.
Website:
• Chartered Institute of Internal Auditors (UK and Ireland): www.iia.org.uk
Definition
Internal auditors work in many organizations in the public and private sectors. They can either be trained
while working or will possess an internal audit or accountancy qualification before applying for an internal
audit position. However, other qualifications can also be useful as the work is varied, challenging, and draws
on a broad range of skills.
However, there is a range of key competencies that are required if internal auditors are to carry out their
function effectively. These will vary depending on the seniority of the auditor. The requirement in terms of
qualifications varies from country to country. In the United Kingdom, for example, an internal auditor is likely
to hold the Chartered Institute of Internal Auditors Diploma in Internal Audit Practice (PIIA) or equivalent.
Senior internal auditors should hold the Institute’s Advanced Diploma in Internal Auditing and Management
(MIIA) or equivalent.
According to the UK government, an internal auditor should have the following competencies.
• Understands the principles of the identification, assessment, and management of risk, including that
arising from the extended enterprise nature of organizations.
• Is able to identify and critically evaluate the elements of governance and risk management in an
organization.
• Is aware of and understands the organization’s risk management strategy.
• Understands the relationship of risk management to corporate governance.
• Is able to review and provide advice and recommendations on the implementation of the risk
management strategy.
• Understands the organization’s high-level objectives, how these are funded, and key related risks.
• Identifies and understands how operational objectives link into the higher-level objectives.
• Understands the relationship between internal audit and risk management, including the choice of roles
available to internal audit depending on the risk maturity of the organization and its possible impact on
corporate governance.
• Understands the specific risks related to operational activities and is able to contribute to the review of
risks in operational areas.
• Is able to relate the organization’s risk appetite to the appropriateness of controls and is able to
undertake reviews to assess their effectiveness and report to management accordingly.
• Understands the principles of performance measurement and output targets designed to deliver
objectives.
Advantages
• Possessing key competencies enables internal auditors to do their job effectively.
• Possession of these competencies helps internal audit staff to gain the confidence and respect of
senior management and of other staff they come into contact with. This is important if they are to carry
out their professional duties effectively.
Disadvantages
• Inevitably there will be costs involved in ensuring staff have the correct training and skills.
Action Checklist
• Ensure that your internal auditors have a continuing commitment to learning. Business and technology
are ever-changing, as are the political and regulatory environments in which a business operates.
• Before developing a training and development plan, ensure that training and development are linked to
the organization’s goals as well as those of personnel.
Dos and Don’ts
Do
• Assess the competency level of each internal auditor, identify the gaps that need remediation, and
develop an individual development plan for each internal auditor.
• Ensure that internal audit staff have an ability to manage projects and to work on their own initiative.
• Link the key competencies required by an internal auditor with your organization’s personal
development and appraisal systems.
• Ensure that internal audit staff have good written and verbal communication skills and are capable of
interacting with senior management.
Don’t
• Don’t forget to conduct a post-audit assessment, which should look at a variety of issues, including
scoring auditors against key competencies.
More Info
Books:
• IIA Research Foundation. Core Competencies for Today’s Internal Auditor. Altamonte Springs, FL: IIA
Research Foundation, 2010.
• Moeller, Robert R. Brink’s Modern Internal Auditing: A Common Body of Knowledge. 7th ed. Hoboken,
NJ: Wiley, 2009.
• Pickett, K. H. Spencer. The Internal Auditing Handbook. 3rd ed. Chichester, UK: Wiley, 2010.
Website:
• Chartered Institute of Internal Auditors (UK and Ireland): www.iia.org.uk
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