Internal Auditor vs. External Auditor: Choosing the Right Career Path

Internal VS External auditor? Which one suits you better!

Are you considering a career in auditing but unsure whether to become an internal or external auditor? Both paths offer exciting opportunities, high earning potential, and professional growth. However, understanding the difference between the two roles is important to choosing the one that matches your goals, skills, and interests.

At Mentcp, we offer specialized CPA courses, CIA exam prep, and AI in Finance training to help you succeed no matter which path you choose. In addition to providing Internal Audit Templates to make your auditing workflow smarter and faster.

To make things clearer, let’s start with the most common question…What exactly is auditing anyway?
In the world of finance and accounting, auditing refers to the formal check-up and evaluation of a person’s or organization’s financial data, reporting accuracy, data security, and compliance with regulations.

Audits can be conducted by internal staff or third-party firms. While both internal and external auditors practice auditing, the why, how, and for whom can be very different.

Internal auditors are employed by a company to examine its internal processes, financial health, and compliance. They are insiders with a deep understanding of the organization, reporting only to senior management and boards of directors.

Internal Auditors Help Organizations By:

Improving operational and spending efficiency
Detecting and preventing fraud or noncompliance
Advising management on corrective measures
Preparing the company for external audits

Internal auditors are often seen as trusted advisors within the company. Their work helps reduce financial risk and enhance decision-making.

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In order to thrive in this role, you need to build a strong skill set that goes beyond accounting principles. Some of the essential skills include:

Financial and risk management
Strong communication and critical thinking
Data analysis and tech proficiency, especially with AI tools
Knowledge of current laws and compliance regulations
Adaptability and continuous learning
Industry-specific insight

On the other hand, unlike internal auditors, external auditors are independent professionals working for third-party firms or government agencies. They assess financial statements and operations of various companies to ensure transparency, accuracy, and regulatory compliance. Their findings are shared publicly with stakeholders such as investors, regulatory agencies, and shareholders.

External Audits Help:

Provide assurance that financial reports are accurate
Validate internal controls
Improve transparency and trust
Ensure compliance with laws like SOX or SEC guidelines

Both internal and external auditors share a foundation of skills, but external auditors must go a step further. Since they work across industries, they need:

Broad knowledge of business law, tax law, and compliance
Expertise in reporting standards and international regulations
Strong communication and people skills, after all, they’re constantly building trust with new clients

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Key Differences between the two types:

Internal Auditors	External Auditors
Work within one organization	Work with multiple clients
Conduct multiple audits year-round	Perform single, annual audits
Reports are for internal use	Reports are public and regulatory
Can consult internally	Cannot offer consulting services

Career Paths and Salaries

Internal Auditors: Typically progress from staff roles to team leads, and eventually to executive positions such as CFO.
External Auditors: Begin at firms and can advance to senior roles or even become partners. Some even start their own firms.

Average salaries reflect the strong demand in the field:
- Internal auditors: $76,185
- External auditors: $86,952
However, with added certifications and experience, both can exceed $120,000 annually.

Audit Smarter with Mentcp

Say goodbye to starting from scratch! Our expertly crafted Internal Audit Templates are your secret weapon for a smoother, stress-free audit process.

What’s Inside?
- Ready-to-use templates for planning, checklists, reporting, and risk assessment
- Customizable for any industry or compliance standard
- Compatible with Excel, Word, and PDF
Imagine having a roadmap for every step of your audit, no more guesswork, just professional results.

Ready to Choose?

Whether you’re drawn to the internal insights of a company or the diverse challenges of external auditing, Mentcp is here to support your journey.
From accounting courses and AI finance lessons to the best CPA and CIA study materials, our platform gives you all the tools to succeed in the world of finance.
Let your career audit begin with confidence, with Mentcp.