The attributes of an auditor you should screen for when hiring
Screen candidates for analytical skills and attention to detail. The IIA also requires objectivity, competency and professional skepticism.
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What makes a good auditor
A good auditor stays objective under pressure, holds the competence for the work in front of them, and questions what management hands them. A candidate can list analytical skills, attention to detail and good communication when you ask about the qualities of an auditor, and you learn little from those claims alone.
In the Global Internal Audit Standards, the IIA places three requirements on the individual auditor:
Objectivity, Standard 2.1. Maintain professional objectivity and manage their own biases.
Competency, Standard 3.1. Possess or obtain the competencies for the work, and decline work they cannot attain them for.
Professional skepticism, Standard 4.3. Question and critically assess the reliability of information, and seek more evidence where a statement may be incomplete, inconsistent, false or misleading.
Use the IIA requirements as a scorecard for these qualities of an internal auditor in the candidate's answers.
How to test the attributes of an auditor in an interview
Screen for the qualities of a good auditor and the attributes of an internal auditor with one question each:
Handling pushback
Ask about a time somebody senior disagreed with a finding, and listen for what they changed.
Competency for the work in front of them
Ask what they have turned down, and why.
Skepticism
Ask how they treat a figure management hands them with no supporting file.
Working papers
Ask whether a colleague could reach their conclusion from their file alone.
Findings a reader will act on
Ask how the reader responded to a finding they wrote, and why.
Confirming fixes
Ask how they check that management made the change, and what they do when management has not.
Internal auditor skills you can test inside an hour
Plant an error.
Put one error in a reconciliation and give the candidate twenty minutes. Score what they find and how they explain it.
Ask for one written finding.
Give them a short scenario. Read the finding as the process owner would, and ask yourself whether that person knows what to do on Monday.
Hand them your own process document.
Ask what they would test first. A candidate who asks what could go wrong before answering has shown you how they scope.
Who an internal auditor should report to
You can test objectivity in an interview, but the organization protects it through the reporting line. The Considerations for Implementation under Standard 2.1 describe objectivity as performing the work without compromise or subordination of judgment to others.
Then look at where you put them. If they report to the finance director whose controls they test, and that person signs off their pay review, you have given that director influence over the audit. Fix the conflict in the reporting structure.
Under the Global Internal Audit Standards, the chief audit executive, who leads the internal audit function, reports directly to the board and typically has an administrative reporting line to the highest-ranking person in senior management, such as the chief executive officer. Under Standard 7.1 the chief audit executive must document those reporting relationships in the internal audit charter. Other internal auditors can report through the chief audit executive; state the line in the job description before the offer stage.
What to put in an internal auditor job description
Put six things in the description:
The cycles for year one, so candidates can match the job to their experience.
Who they report to and who reviews their pay, so candidates can judge their independence.
The standards you expect them to work to.
Whether the first-year plan exists or the hire writes it. Those are different jobs; name the one you are offering.
The credentials you require. CPA or CIA for the role, and CISA where you include IT controls in the scope.
What you will not ask them to audit, and the audit attributes you will screen against.
If you claim the whole business in the job description, you have not scoped the role and cannot test candidates against clear limits.
When to outsource the internal audit role
Internal audit pages to read next
- Internal audit services
- SOX compliance audits
- Financial statement audits
- How often internal audits should be conducted
- Internal audit outsourcing
- Internal audit report
Treat the information as general. Ask a CPA to look at your own facts before you fix the role.
How we set the cost of covering the role
We set the fee on four things:
Cycles in scope
We charge less for two cycles than for the full year's plan.
Hours per month
We price a standing arrangement on the hours your board approves.
Plan or cycles
We charge more to write the first-year plan than to run cycles on a plan you hold.
Reporting
We charge more where we present to the board than where we report to one owner.
Tell us what the role has to cover
Send the cycles you want examined and the shape of the role you have in mind. We will tell you whether that is a hire, a part time arrangement, or work you should place outside.
Contact
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Reviewed by George Dimov, CPA. Dimov Audit reviews accounting processes and internal controls for boards and owners across all 50 states. George brings 20+ years of accounting and consulting experience. Profile