Ever since the start of the credit crunch – which initiated the worldwide economic crisis and the banking crisis – the financial sector has suffered under severe criticism and increasing surveillance. Governments, (stock listed) companies, media and civilians insisted on structural changes to be implemented in the financial sector.
Recently made errors indicated that change was necessary, more so than ever before. This has resulted in the implementation of new legislation and increased control.
This has resulted in an increased focus on finance, risk and compliance departments within the banking industry. At the same time this has resulted in new career opportunities for job seekers and changing role responsibilities for some. One such role is that of an internal auditor. Here we discuss the responsibilities of an internal auditor and what qualifications and competencies you should have if you are seeking to work in this area.
The internal auditor
Internal auditors are responsible for various controls that need to be performed and checked by the external financial accountant. According to the principle of ‘The 3 Lines of Defence’, the auditor operates in the third Line of Defence. The first line is covered by the business and the second line by the departments of finance, risk and compliance.
Generally, audit is divided into operational audit and financial audit. An internal auditor asks the following questions: has the financial institution reported in accordance with Basel II/III or Solvency? Are the figures and numbers correctly reported by the bank? Have the employees conducted business in accordance with the compliance procedures? Can we therefore report to the external financial accountant that we are ‘in control’?
What competencies are required to be an internal auditor?
As an internal auditor, being successful should be your main motivator. The financial world has seen a large amount of new legislation introduced in a very short period of time. As the legislation needs to be correctly implemented within a short timeframe, internal controls covering the implementation is extremely important. On top of this, periodic follow-ups are required. Departments need to adjust their processes and the behaviour of their employees according to the new legislation. Whenever a department faces a negative assessment after an audit, immediate improvement is required.
In order to make improvements, an auditor needs tools like strong interpersonal skills. You should be capable of changing people; more specifically, changing their behaviour and creating awareness. Strong communication skills, persuasiveness and perseverance are all skills an internal auditor needs to be successful in the role. Two additional competencies are integrity and independence.
What work experience and education is relevant for an internal auditor role?
Employers are always looking for professionals able to ‘hit the ground running’. This refers to someone who is able to add value to the company from their first day at work. Professionals who have previously worked for a ‘Big 4’ are often considered to be very suitable for internal auditor roles.
If your internal clients included financial institutions then this would make you even more in demand. Theoretical knowledge and practical experience with Basel II/III and Solvency are necessary. Significant affinity with figures and numbers are key; and Master studies in Economics or Business Economics is common. Completion of or studying towards a Chartered Accountant professional qualification is desirable.
In order to make improvements, an auditor needs tools like strong interpersonal skills. You should be capable of changing people; more specifically, changing their behaviour and creating awareness.
Securing a role as an internal auditor
Employers are looking for prospective employees to show motivation for the role and interest in the company. It is important to undertake research into the company you are interviewing with before the interview – this will help demonstrate your commitment and interest for the role. Your resume should meet the requirements listed in this article and reflect your interest in this specialist field.
If you are interested in a career as an internal auditor, we can assist you to secure your new role. We have an established client base of financial institutions and are often made aware of new opportunities before they are released to the market.
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