Auditors are in increasing demand due to regulations concerning companies' financial accountability. For both internal and external auditors, a minimum of a bachelor's degree is needed, although a master's degree and other certifications can help increase job opportunities. Depending on whether a professional is an internal or external auditor, employment can be found with auditing firms, companies, or in private practice.
An auditor is a type of accountant who is responsible for checking a corporation's accounts and financial records to ensure that they are correct and transparent. Generally, auditors fall into one of two categories, external or internal. An undergraduate degree in accounting is the minimum educational requirement for auditors, though further career opportunities are open to those with master's degrees. Certain professional certifications may also be required depending on an auditor's specific career functions.
|Required Education||Bachelor's degree at minimum; Master's degree preferred|
|Other Requirements||Certified Public Accountant (CPA) or Certified Internal Auditor (CIA) credential|
|Projected Job Growth (2018-2028)||6% for all accountants and auditors*|
|Median Salary (2018)||$70,500 for all accountants and auditors*|
Source: *U.S. Bureau of Labor Statistics
Education Requirements for Becoming an Auditor
An undergraduate degree in accounting is the minimum educational requirement for pursuing a career as an auditor. However, most public accounting firms prefer that their internal auditors hold a master's degree in accounting. Many external auditors are encouraged to pursue the Certified Public Accountant (CPA) credential after completing their education. The Certified Internal Auditor (CIA) credential is recommended for internal auditors working for large corporations.
Bachelor of Accountancy
A Bachelor of Accountancy program awards a professional degree and prepares graduates for entry-level accounting positions with public accounting firms, nonprofits and private organizations. Accounting is considered a subfield of business and, as a result, many undergraduate degree programs in accounting are offered by schools of business. Some schools offer bachelor's degrees in business with a concentration in accounting instead of separate accountancy degrees.
All types of accounting degree programs require students to complete some core business courses. These business classes cover topics such as business law, business communications, management, marketing and organizational behavior. Accounting-specific classes include auditing, cost accounting, accounting information systems, federal tax accounting and financial statement analysis.
Master of Accountancy
A Master of Accountancy generally takes one year of full-time study to complete and in most cases meets the 150 credit hour requirement set forth by most states for certification eligibility. The degree is often referred to as the Master of Professional Accountancy or Master of Science in Accountancy. A Master of Accountancy degree program is interdisciplinary and covers advanced topics in accounting. Some of the topics covered include federal income tax, auditing, accounting ethics, performance measurement and valuation.
Students who do not have a background in business or accounting can apply apply to a Master of Accountancy program. However, these students are often required to complete a series of prerequisite courses before beginning the degree. Many Master of Accountancy programs require no thesis but may have an internship requirement during the final semester.
All external auditors are required to earn the Certified Public Accountant (CPA) credential if they file a report with the Securities and Exchange Commission (SEC). Currently, 150 semester hours is needed for certification. The only states that do not have this hourly requirement include New Hampshire, Colorado, California and Vermont. The CPA exam is administered by the American Institute of Certified Public Accountants (AICPA) and consists of four parts.
Very rarely does a certification candidate pass all four parts of the exam the first time it is taken. However, all parts must be passed within 18 months of passing at least one section. Internal auditors are required to complete certification from the Institute of Internal Auditors (IIA). The Certified Internal Auditor (CIA) credential is awarded after the successful completion of an exam. The exam also consists of four sections and is offered year round.
An auditor is responsible for analyzing a firm's financial records to make sure that these records actually reflect the company's current financial state. They also confirm that a company is not involved in fraud or the mismanagement of funds. Internal auditors make recommendations on company operations and suggest changes to policies that may not comply with government regulations and laws. External auditors typically work for a public accounting firm, but some are self-employed.
According to the U.S. Bureau of Labor Statistics (www.bls.gov), an 6% increase in the employment of auditors and accountants is expected for the 2018-2028 period. That's because accountants and auditors will be needed to ensure that companies are in compliance with strict government laws and regulations regarding accountability. Payscale.com reports that most auditors with 1-4 years of experience earned an annual salary of $54,299 in 2019. Most auditors with 10-19 years of experience earned an average annual salary of $70,322 in that year.
Education for an auditor starts with accountancy programs and an auditor credential is also required for most auditor positions. Auditors can choose to become either external auditors or internal auditors. The required certification is dependent on this decision and each category has its own set of responsibilities and employment options.