An internal auditor evaluates and assesses a company's financial and operational processes and procedures to identify potential risks, inefficiencies, and compliance gaps. Internal auditors work within the company and are responsible for ensuring that internal controls and governance processes are in place and functioning effectively.
Hiring an internal auditor can be beneficial to companies in several ways. Firstly, internal auditors can help companies identify and mitigate risks, potentially saving them from costly errors, fraud, or legal penalties. That's why we have curated operational and situational questions, role-specific questions, and behavioral questions that can help in your interview process to hire the ideal candidate.
General Roles and Responsibilities of an Internal Auditor
Below are the typical roles and responsibilities of an internal auditor:
- Reviewing financial records: The internal auditor must review financial records to ensure that they are accurate and in compliance with applicable laws and regulations.
- Assessing risks: The internal auditor must assess the risks that the organization faces and identify areas where there may be potential weaknesses or vulnerabilities.
- Developing audit plans: Based on the assessment of risks, the internal auditor must develop an audit plan that outlines the specific areas to be audited and the procedures that will be used to conduct the audit.
- Conducting audits: Conducting audits to evaluate the effectiveness of the organization's internal controls, processes, and procedures is important. This includes testing transactions and verifying documentation.
- Reporting findings: Based on the findings of the audit, the internal auditor must prepare written reports and also suggest any areas where improvements can be made.
- Following up on recommendations: The internal auditor follows up on the recommendations made in previous audits to ensure that the organization has implemented the necessary improvements.
Skills and Experience an Internal Auditor should have:
An internal auditor should have technical, analytical, communication, and interpersonal skills, as well as relevant experience. Some of them are as below:
- Accounting and financial expertise: An internal auditor must be proficient in accounting principles and financial statements to effectively review financial records and assess risk.
- Audit experience: Experience in conducting audits and being familiar with audit methodologies and techniques is one of the prime fortes of an internal auditor.
- Knowledge of relevant laws and regulations: A good understanding of the laws and regulations that apply to the organization they are auditing helps them explore new career avenues.
- Analytical and critical thinking skills: Analyzing complex data and identifying patterns, trends, and potential risks is as important as providing customer service.
- Communication skills: An internal auditor must be an excellent written and verbal communicator for effectively communicating findings, recommendations, and audit results to stakeholders.
- Interpersonal skills: Strong interpersonal skills are essential to building relationships with stakeholders, collaborating with team members, and providing training and support to employees.
- IT and data analysis skills: With the increasing use of technology in organizations, an internal auditor should have basic IT skills and the ability to use data analysis tools to perform data analytics.
Internal Auditor Operational and Situational questions
Operational and situational questions throw light on how an internal auditor candidate behaves in a specific circumstance or situation.
- How do you handle cases of fraud?
- If you suspect a company is exposed to a major risk. What risk management techniques will you use?
- Tell me about a serious operational issue you ever detected. How did you know about it and what solutions did you suggest?
- How do you deal with uncooperative team members? · Have you ever experienced conflict in your workplace? How did you resolve it?
- Tell me about a time when you suggested a new plan and it proved successful.
- What type of challenges do you face when presenting a new recommendation? How do you persuade your seniors?
- Has anyone ever asked you to cover up fraud? What did you do?
Internal Auditor Role-specific questions
Role-specific questions help you assess a candidate's fit for the role of internal auditing.
- How do you think your education and experience have helped you to be an Internal Auditor?
- What are the reports you consider when developing an audit plan?
- What do you do after finishing an audit?
- Name the key elements of internal control systems. How do you review them?
- Do you know about IFRS?
- What is information technology control?
- What is your approach to collecting important raw data?
- How do you stay upbeat with changes in laws and regulations?
- How does internal auditing add value to an organization?
- What do you like about your job role as an Internal Auditor?
Internal Auditor Behavioral questions
These types of questions are aimed at assessing a candidate's past behavior in specific situations and how they approach their work.
- Tell me about a time when you identified a risk in a company's internal controls. What steps did you take to mitigate the risk?
- Have you ever encountered resistance when performing an audit? How did you handle it?
- Describe a time when you had to collaborate with a team to complete an audit. How did you contribute to the team's success?
- Can you give an example of a time when you identified a problem during an audit and had to communicate the issue to management? How did you handle the situation?
- Have you ever had to make a difficult decision during an audit? How did you approach the decision-making process?
- Tell me about a time when you had to audit a complex process. How did you ensure that you understood the process and identified all potential risks?
- Describe a situation where you had to work with a colleague who had a different working style than you. How did you handle the situation?
Conclusion
Internal auditors play a critical role in evaluating and assessing a company's financial and operational processes and procedures to identify potential risks, inefficiencies, and compliance gaps. Hiring an internal auditor can be beneficial for companies in several ways, including identifying and mitigating risks, potentially saving them from costly errors, fraud, or legal penalties.
When hiring an internal auditor, it is important to consider their technical, analytical, communication, and interpersonal skills, as well as their experience in conducting audits and their knowledge of relevant laws and regulations. The operational and situational questions, role-specific questions, and behavioral questions provided in this blog can help in the interview process to hire the ideal candidate.
