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About the Profession
Internal auditing is an independent appraisal function established within an organization to examine and evaluate the adequacy and effectiveness of the organization's internal control system and its overall quality of performance. Internal auditing furnishes top management with analyses, appraisals, recommendations, counsel, and information concerning the activities reviewed.

Internal auditing reviews the reliability and integrity of information, compliance with policies and regulations, the safeguarding of assets, the economical and efficient use of resources, and established operational goals and objectives. Internal audits encompass financial activities and operations including systems, production, engineering, marketing, and human resources.

The IIA believes that an organization is best served by a fully resourced and professionally competent internal auditing staff that provides value-added services that are critical to the efficient and effective management of an organization.

According to the National Commission on Fraudulent Financial Reporting (Treadway Commission), every public corporation should have an internal audit function.

Who Are Internal Auditors?
Internal Auditors step up with bold ideas to solve tough problems. Continually striving for the best, constantly polishing their skills, and consistently modeling integrity and ingenuity.

Internal auditors are, to a great extent, key to an organization's success in today's business world. They are involved in reviewing an organization's processes, operations, and goals. They provide useful professional advice to all levels of management and pave the path for continuous improvement. They are explorers, reporters, and analysts. They discover, interpret, and question. The most valuable and effective internal auditors anticipate and stay abreast of business trends and continually update their knowledge to stay on top of key issues. They are proactive, responsive, and reactive.

Internal auditors bring a variety of skills to the organization. Their education and expertise differ broadly. They come from such diverse areas as engineering, operations, finance, and information technology. And today's auditors, regardless of their industry, have extensive knowledge of computer systems and the Internet, and work to mitigate new risks introduced to the organization by technology and electronic commerce. And many internal auditors become specialists in such areas as control self-assessment and environmental auditing. Not only is the auditor the right arm of management in ensuring that policies and procedures are carried out effectively and that risks are kept to a minimum, but auditors are actively involved with governance. Serving as consultant to management, as coach to staff, and as reporter to the audit committee, the internal auditor's roles and relationships are constantly evolving, expanding, and changing.

Professional internal auditors have high levels of commitment and integrity. They address problems and improve performance. They help their organization function to the best of its ability and cast their eyes to the horizon, constantly scanning for signs of trouble. They offer their organization a sense of well-being and comfort, providing the secure knowledge that if there are glitches, they'll find them.

The Changing Control Environment
The internal auditors' control world has changed. Internal auditing was conceived in the controllers' offices of large corporations by managers trained in the public accounting profession. Internal auditors were part of the control process; and, until the 1980s, that meant they were part of the accounting process because control meant accounting control.

The term "control" has expanded far beyond accounting control to the modern control framworks recommended by Internal Control -- Integrated Framework (COSO), the Canadian Criteria of Control Board (CoCo), and the U.K.'s Cadbury Commission. In its report, COSO broadly defines internal control as "a process, affected by an entity's board of directors, management and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following catagories: effectiveness and efficiency of operations, reliability of financial reporting, and compliance with applicable laws and regulations."

The Changing Profile of Internal Auditors
An IIA research report, Enhancing Internal Auditing Through Innovative Practices, identifies several trends which will change the profile of internal auditors in the future and define new roles for the profession. Each trend suggests new demands, challenges, and opportunities for internal auditing and emphasizes the need for a dynamic internal auditing staff.

• Data security will be the greatest corporate risk in the next century. Internal auditors' expertise in the use, control, and auditability of the organization's technology can help their organization address information systems issues and risks.
• Globalization increases the complexity of the principles, regulations, and cultures in which organizations operate. Auditors are uniquely positioned to assess compliance with international quality standards, ISO 9000; and international environmental standardsd, ISO 14000.
• Legal and government related trends regarding accounting and auditing carry important implications for internal auditors. Internal auditing departments can help to ensure compliance with employment, safety, and environmental regulations.
• Current economic conditions and growing competition are putting more pressures on internal auditing organizations to be more productive when conducting financial audits and to expand their operational and consulting activities.
• Increased emphasis on total quality management and the control environment has resulted in specializations such as control self-assessment and environmental auditing.
• Reengineering and other activities are breaking down traditional hierarchical structures and changing reporting relationships and management responsibilities.
• Internal auditors who are recognized by management as the leaders of control -- not only internal control but also management control -- are essential to the future success of the organization.

Statement of Responsibilities of Internal Auditors
The purpose of this statement is to provide in summary form a general understanding of the responsibilities of internal auditing. For more specific guidance, readers should refer to the Standards for the Professional Practice of Internal Auditing.

Objective and Scope
Internal Auditing is an independent appraisal function established within an organization to examine and evaluate its activities as a service to the organization. The objective of internal auditing is to assist members of the organization in the effective discharge of their responsibilities. To this end, internal auditing furnishes them with analyses, appraisals, recommendations, counsel, and information concerning the activities reviewed. The audit objective includes promoting effective control at reasonable cost. The members of the organization assisted by internal auditing include those in management and the board of directors.

The scope of internal auditing should encompass the examination and evaluation of the adequacy and effectiveness of the organization's system of internal control and the quality of performance in carrying out assigned responsibilities. Internal auditors should:

• Review the reliability and integrity of financial and operating information and the means used to identify, measure, classify, and report such information.
• Review the systems established to ensure compliance with those policies, plans, procedures, laws, regulations, and contracts which could have a significant impact on operations and reports, and should determine whether the organization is in compliance.
• Review the means of safeguarding assets and, as appropriate, verify the existence of such assets.
• Appraise the economy and efficiency with which resources are employed.
  Review operations or programs to ascertain whether results are consistent with established objectives and goals and whether the operations or programs are being carried out as planned.

Responsibility and Authority
The internal auditing department is an integral part of the organization and functions under the policies established by senior management and the board. The purpose, authority and responsibility of the internal auditing department should be defined in a formal written document (charter). The director of internal auditing should seek approval of the charter by senior management as well as acceptance by the board. The charter should make clear the purposes of the internal auditing department, specify the unrestricted scope of its work, and declare that auditors are to have no authority or responsibility for the activities they audit.

Throughout the world internal auditing is performed in diverse environments and within organizations which vary in purpose, size, and structure. In addition, the laws and customs within various countries differ from one another. These differences may affect the practice of internal auditing in each environment. The implementation of the Standards for the Professional Practice of Internal Auditing, therefore, will be governed by the environment in which the internal auditing department carries out is assigned responsibilities. Compliance with the concepts enunciated by the Standards for the Professional Practice of Internal Auditing is essential before the responsibilities of internal auditors can be met. As stated in the Code of Ethics, members of The Institute of Internal Auditors, Inc. and Certified Internal Auditors shall adopt suitable means to comply with the Standards for the Professional Practice of Internal Auditing.

Independence
Internal auditors should be independent of the activities they audit. Internal auditors are independent when they can carry out their work freely and objectively. Independance permits internal auditors to render the impartial and unbiased judgments essential to the proper conduct of audits. It is achieved through organizational status and objectivity.

The organizational status of the internal auditing department should be sufficient to permit the accomplishment of its audit responsibilities. The director of the internal auditing department should be responsible to an individual in the organization with sufficient authority to promote independance and to ensure a broad audit coverage, adequate consideration of audit reports, and appropriate action on audit recommendations.

Objectivity is an independent mental attitude which internal auditors should maintain in performing audits. Internal auditors are not to subordinate their judgment on audit matters to that of others. Designing, installing, and operating systems are not audit functions. Also, the drafting of procedures for systems is not an audit function. Performing such activities is presumed to impair audit objectivity.

Scope of Work
According to The IIA's Standards for the Professional Practice of Internal Auditing, "The scope of internal auditing should encompass the examination and evaluation of the adequacy and effectiveness of the organization's system of internal control and the quality of performance in carrying out assigned responsibilities." In most organizations this encompasses examining the reliability and integrity of information; compliance with policies, plans, procedures, laws, and regulations; and safeguarding of assets.

Internal auditors are uniquely positioned to examine the economical and efficient use of resources and the accomplishment of established goals and objectives for operations or programs. They help management achieve a balanced system of internal control for information technology and assure senior executives that the use and control of information systems are consistent with the organization's overall strategies. Internal auditors are involved in the systems development process to help identify control and auditability specifications for new systems. They perform independent reviews of information systems and projects and act as consultants during decisions involving control cost and benefit trade-offs. Greater knowledge and participation on the part of the internal audit function help to ensure a controlled and reliable information systems environment.

In summary, modern-day internal auditing is both a management and a governance activity that takes advantage of the auditor's diverse experience, knowledge, and expertise, and contributes to sound corporate governance and managerial stability.

The Global Measure of Value
As the only internationally accepted designation for internal auditors, your CIA will be with you wherever you go. The CIA is extremely versatile and adjusts to the profession's worldwide needs. It embraces those trends which change the profile of internal auditors in the future and define new roles for the profession.

Evaluating emerging technologies. Analyzing opportunities. Assessing quality, economy, and efficiency. Providing accurate and timely communication. Such diversity gives Certified Internal Auditors a global perspective of the organization. And that makes you essential to the future success of your organization and the profession of internal auditing.

The Manager's Best Credential
When you take your career to the CIA level of professionalism, you will have acquired the manager's best credential. Your value as a manager (or potential manager) will increase because of your understanding of business threats and internal controls. The CIA demonstrates your ability to identify inherent and potential risks and to make recommendations for minimizing those risks. Your skill in confirming that an appropriate control environment exists and remaining in control of that environment is an enduring managerial asset.

Bringing Value to Professionals Worldwide
Preparing for the CIA examination is by far the most comprehensive review of the profession available. Studying and sitting for the CIA exam is especially beneficial to staff auditors, students, and anyone wishing to increase their competency and efficiency. Even professionals who had previously earned a master's or law degree report that their knowledge and skill levels increased significantly because of their CIA candidacy and preparation.

Earning the designation gives you a recognized credential for the employment market -- an edge over others vying for the same position. It prepares you for a professional future that will readily go beyond what even you might envision.

The key to success in today's fast-paced and ever-changing business environment is being the best that you can be -- and holding the CIA designation tells the world that you are!

Become a CIA and join more than 27,000 auditing professionals who have earned the right worldwide to proudly wear the red ribbon of success.