Certified internal auditor

Certified Internal Auditor (CIA) is a designation of professional certification issued by The Institute of Internal Auditors of North America (IIA) to professionals specializing in internal auditing. The certification is recognized worldwide. Individuals holding a CIA are perceived to have a certain level of competency in the profession .

The establishment of the CIA designation by the IIA raised the internal audit function to a status of a recognized profession, as it established a "a body of specialized knowledge (common body of knowledge approved in 1972), a formal education process (a minimum prescribed course of formal education), standards governing admission to a full member of The IIA (prescribed course of study, passing CIA exam, professional experience requirements, and the Standards), a Code of Ethics (first approved in 1968), a recognized status indicated by a license or specialized designation (the CIA, or MIA, recognized several jurisdictions worldwide a public interest in the work that the practitioners perform (perhaps more evident in the work performed by internal auditors in government, education, and nonprofit organizations rather than in the private sector), and a recognition by professionals of a social obligation (again, perhaps more evident in government, education, and nonprofit organizations)".

Obtaining a CIA license

The CIA designation requires a completion of a three-part examination and other eligibility criteria as follows:

• Education: applicants must have at the minimum an associate degree
• Character: applicants must demonstrate high moral and professional character as documented in a declaration signed by a qualified individual (licensed professional or applicant's supervisor)
• Work: experience requirements vary depending on the level of education completed:

1. Master’s degree: 12 months of auditing experience

2. Bachelor’s degree: 24 months of auditing experience

3. Associate degree: 60 months of auditing experience

Applicants can sit for the exam prior to meeting experience requirements; however, licensing takes place only after all criteria have been met.

Maintaining a CIA license

CIA professionals are required to complete continuous professional education (CPE) to stay current on industry standards. CPE requirements depend on license status. These requirements are as follow:

• Practicing professionals - 40 CPE hours annually
• Nonpracticing professionals - 20 CPE hours annually

CIA professionals self-report completion of CPE hours by December 31 each year. All CIAs are required to complete at a minimum two CPE hours in annual ethics training. The IIA defines qualifying CPE activities. Qualified CPE activities are categorized as follows:

• Educational programs meeting specific quality standards.
• Other qualifying activities - examinations, writing or translating publications, making presentations, volunteering as an expert matter person, performing external quality reviews.

CIA professionals are required to maintain CPE records for three years. The IIA has the right to audit CPE records.

Value - added role of a CIA

CIA professionals work in the internal audit departments. The role of an internal audit department, in broad terms, is to provide an independent attestation or independent testing to determine conformity to established policies and procedures and adequacy of internal controls. The value-added aspect of an internal audit function is perceived differently by different companies. James Roth attempts to define a value-added internal audit program. The author identifies five value-adding features of an internal audit department.:

• Extensive staff expertise - employees in internal audit departments typically have long tenures, with an average of ten years of business experience. Audit staff is multi-disciplinary in a subject matter and audit techniques. Audit staff is highly trained with 75 percent of staff certified (CIA or other). Best auditors are technology savvy. Outsourcing is common, which provides access to highly skilled pool of individuals.
• Challenging work environment - a work culture that encourages responsibility, accountability, creativity, and that motivates and provides challenge.
• Organizational alignment - organizational structures that promote establishment of ongoing connection of the internal audit department with other departments. Auditor involvement in committees and other business functions (for example new product development).
• Proactive, qualitative, real-time risk assessment - alignment of the audit plan with the firm's strategic plan to assist management in accomplishment of strategic goals. A real-time risk assessment provides value to decision makers by providing feedback before a firm commits to a [[project.
• An array of audit services - a value-added audit function provides an extensive list of services in assurance and consulting activities. Those services may include risk-based audits, process audits, pre-implementation reviews, self-assessments, and employee education.

Advantages of Certified internal auditor

Having the Certified Internal Auditor (CIA) designation has numerous advantages for internal auditors.

• It is globally recognized as a mark of competency, credibility, and professionalism in the field.
• It is highly sought after by employers, as it demonstrates the holder has the necessary knowledge, skills, and experience to effectively manage the internal audit process.
• Holders of the CIA are better equipped to provide objective and independent assessments of internal controls and risk management processes.
• CIA holders also receive access to ongoing education and career development opportunities with the IIA, such as webinars, conferences, and other professional development activities.
• The certification also offers a competitive salary advantage, as those with the CIA designation often earn higher salaries than those without the designation.

Limitations of Certified internal auditor

The Certified Internal Auditor designation has certain limitations that should be noted. These include:

• It is not an indication of the individual’s technical proficiency in any specific field related to auditing.
• It does not guarantee the individual’s ability to identify and detect fraudulent activities.
• It does not provide the individual with any legal authority or rights.
• It does not guarantee the individual’s ability to identify potential areas of risk or control weaknesses.
• It does not provide any specific level of expertise or guarantee of competence in a particular subject.
• It does not provide any assurance that the individual is qualified to perform or has the knowledge to perform any specific audit or review.

Other approaches related to Certified internal auditor

Certified Internal Auditor (CIA) is a professional certification issued by The Institute of Internal Auditors (IIA) to individuals specializing in internal auditing. Other approaches to internal auditing include:

• The International Professional Practices Framework (IPPF), which is the set of standards, ethics, and guidance issued by the IIA.
• The International Standards for the Professional Practice of Internal Auditing (ISPPIA), which are the international standards for performing and reporting on internal auditing activities.
• The Global Internal Audit Common Body of Knowledge (CBOK), which is the body of knowledge for internal auditing.
• The Certified Government Auditing Professional (CGAP) designation, which is a certification program for government auditors.

In addition to the Certified Internal Auditor (CIA) designation, these other approaches provide professionals with the knowledge and skills they need to effectively and efficiently perform their internal auditing activities. Together, they provide an international benchmark of competency and professional excellence in performing internal audit activities.

Certified internal auditor — recommended articles

Internal audit — Management rights — Staff authority — Quality policy — Quality manager — Models of strategic personnel management — Law firm — Quality system in local government — Validation master plan

References

• IIA Professional Certification Board. (2017). Continuing Professional Education Policy. 'Annual CPE Hours', p. 4
• Ramamoorti, S. (2003). "Internal auditing: history, evolution, and prospects." 'Internal Auditing: An Historical Perspective', p. 7
• Roth, J. (2003)."How do internal auditors add value." 'Profile of a value-adding audit department', p. 2-5
• The Institute of Internal Auditors. (2018). "Eligibility Requirements." 'Education, Character Reference, Work Experience', nr 3, p. 1
• The Institute of Internal Auditors. (2018). "New to Certification?" 'Why Become Certified?', nr 3, p. 1

Footnotes

Author: Urszula Szydłowska