Certified Internal Auditor (CIA) Definition

What is a Certified Internal Auditor (CIA)?

A Certified Internal Auditor (CIA) is a certification offered to accountants who perform internal audits. The title of certified internal auditor is conferred by the Institute of Internal Auditors (IIA) and is the only such degree accepted worldwide.

CIAs typically work in the audit service government agencies, financial institutions, or companies. They review financial records to look for gaps in internal controls.

Key points to remember

  • A Certified Internal Auditor (CIA) is a certification issued to accountants who perform internal audits.
  • The CIA is awarded to individuals by the Institute of Internal Auditors (IIA) after passing the required examinations.
  • The audit departments of government agencies, financial institutions, and corporations are where CIAs are typically employed.
  • CIAs are similar to Certified Public Accountants (CPAs), however, CPAs are mostly recognized only in the United States, while CIAs are recognized worldwide.

Understanding a Certified Internal Auditor (CIA)

Certified Public Accountants (CPA) are also trained in auditing and can perform many of the same functions as a CIA; however, the professional with a CIA designation will have a more micro-centric skill set.

One important difference is that the CPA designation is often only recognized in the United States, whereas the CIA is an internationally recognized designation. Although CPAs can be employed directly by a company in an auditor role, it is far more common for them to come into a company from the outside (external) to perform auditing functions. CIAs are therefore more likely to be employed directly by a company. Although not very common, an accountant can pursue and hold both a CPA and CIA designation.

Internal auditors are generally subject to a code of ethics. An example of internal auditors who do not comply with this code is the Lehman Brothers scandal in 2008. Managers received high salaries despite the company’s financial difficulties. In addition, inadequate internal controls allowed the accounting system to be manipulated by reporting fabricated figures in the balance sheets. The actions were illegal, unethical, biased, unprofessional, and violated the CIA’s code of ethics.

How to Become a Certified Internal Auditor (CIA)

Accountants seeking CIA certification must obtain a bachelor’s degree and have at least two years of work experience in a related field. Internal Audit, such as internal control, compliance and quality assurance. Other requirements include a character reference and proof of identity. If you become a CIA, you will also need to meet Continuing Education (CE) requirements of 40 hours per year to maintain your certification.

CIAs have a wide range of career options. A CIA can rise to a leadership position, such as vice president, audit manager, or director. A CIA may specialize as an internal auditor, chief audit executive, and compliance auditor, or in investigative auditing and information technology auditing. CPAs tend to earn slightly higher salaries than CIAs, but this will depend on each CIA’s job title and role.

History and government requirements for internal auditors

The IIA was launched in 1941 and solidified the practice of internal auditing as a profession. In 1950, Congress required that every executive agency include internal audits in the agency’s internal control system. Internal auditing became a separate accounting function in the mid-twentieth century.

In 1977, the Foreign Corrupt Practices Act has completely reshaped the internal audit industry. The law prevented companies from hiding funds and committing bribes. The law required companies to maintain adequate internal control systems and keep complete and correct financial records, which increased the demand for internal auditors.

The first CIA exam was held in 1974 and by the end of 2021 there were over 178,000 CIAs.

Outlook for Certified Internal Auditors (CIA)

Hiring of auditors should increase. Due to changes in financial reporting legislation, Society taxesand Mergers and Acquisitionsan increase in demand for auditors and a need for increased accountability to protect organizations and their stakeholders, is certain. The role of auditors continues to evolve, which will drive employment growth in the industry. In addition, succession planningretirement and staff turnover will create new job opportunities in the industry.

Companies and government agencies will continue to hire internal auditors to strengthen internal controls. Because accounting scandals and financial irregularities are still a real problem that investors and analysts need to be aware of, the role of CIAs will remain important for the foreseeable future.

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