SOURCE: The Institute of Internal Auditors
ORLANDO, FL--(Marketwired - Oct 3, 2013) - As economic uncertainty continues to be on the minds of employees and employers alike, the salaries of internal auditors in the U.S. show some encouraging signs. Although compensation practices for internal audit -- which were on a two-year growth trajectory -- appear to be tapering off, internal audit professionals are being compensated favorably based on the value they deliver. This is one of several key findings in the 2013 Internal Audit Compensation Study published annually by The Institute of Internal Auditors' (IIA's) Audit Executive Center.
"Although there's certainly room for improvement in the job market, this data also shows that internal auditors are demonstrating unique value to their organizations," says IIA President and CEO Richard Chambers, CIA, CGAP, CCSA, CRMA. "It's definitely encouraging news."
AUDITORS LOOKED UPON FAVORABLY
Overall, The IIA's 2013 Compensation Study documents some notable shifts in compensation and recruitment/retention strategies, indicating that organizations are being more conservative this year than in other recent recovery years. The majority of organizations are reining in some of the ultrahigh salary increases with predictions that increases in 2014 will fall between 2 and 4 percent.
However, a higher percentage of organizations are granting internal auditors salary increases of 4 percent or higher when compared to salary increases for non-audit employees. For example, among the organizations surveyed, 16 percent granted salary increases of 4 percent or more to their internal auditors in 2013, compared to 9 percent that granted increases of this magnitude to non-audit employees.
Salary data also indicates that the number of organizations that are not awarding salary increases to any internal auditors continues to decrease. The number of organizations that did not award salary increases to any internal auditors decreased to 12 percent, down 2 percent (from 14 percent) from 2012 and down 6 percent from 2011.
Of the organizations that are planning to award raises to internal auditors next year (91 percent), the majority are looking to award these increases to 100 percent of their internal audit workforce. For instance, 68 percent of organizations surveyed expect to award 100 percent of their staff with salary increases next year (as compared to 63 percent that awarded raises to 100 percent this year).
SPECIALTY SKILLS PAY, EDUCATION, AND CERTIFICATIONS PAY
This year, as in previous years, specialization links to higher pay, but there was no significant difference in median salary among specialty areas. The median salary of internal auditors specializing in IT; fraud and forensics; and environmental, health, and safety were all significantly higher than general financial and operational auditors.
Level of education is another factor that correlates with higher base salaries for internal auditors. For instance, organizations in this study reported that internal auditors with master's degrees earned an average of 15 percent more than internal auditors with bachelor's degrees. This has jumped up from 8 percent reported in 2012. At the same time, there has been a steady decrease in the percentage of auditors holding master's degrees -- down 10 percent from 39 percent in 2011.
Professional certifications were also associated with higher salaries for internal auditors in this year's study. Responses indicated that internal auditors with certifications in one or more areas earned more than non-certified internal auditors. In 2013, the median income of noncertified internal auditors in the United States was $29,000 less than that of internal auditors holding a professional designation. When looking specifically at The IIA's Certified Internal Auditor (CIA) and Certification in Risk Management Assurance (CRMA) designations, auditors earn a median salary of $98,136 and $117,041, respectively. Interesting to point out, in 2012 auditors holding a CPA earned slightly more than auditors holding a CIA. In 2013, however, CIAs outpace CPAs in salary earnings.
RECRUITMENT AND RETENTION
For internal auditors in the United States, paid time off is still the No. 1 retention and recruitment strategy according to 88 percent of participants, which remains a consistent result since the first Compensation Study in 2008. Other top strategies, in ranked order, are: travel reimbursement (82 percent), wellness programs (74 percent), tuition reimbursement (73 percent), In the U.S., the following recruitment and retention strategies have notably decreased in popularity since 2012: automobile reimbursement (down 7 percent), performance bonus (down 10 percent), tuition reimbursement (down 9 percent), and telecommuting (down 7 percent).
The Executive Summary of the 2013 Internal Audit Compensation Study is available for free download. A detailed report, including exclusive data such as salary by geographic region, organization size, and other demographics, is available for purchase from The IIA's Research Foundation Bookstore.
About The IIA
Established in 1941, The Institute of Internal Auditors (IIA) is an international professional association with global headquarters in Altamonte Springs, Florida, USA. The IIA is the internal audit profession's global standard-setter, chief advocate, and principal educator.
About the Audit Executive Center
The IIA's Audit Executive Center is an exclusive service to support chief audit executives in meeting the demands of their evolving roles. The Center empowers its members to perform through delivering unparalleled access to a growing knowledge repository of nearly 900 pieces of thought leadership; a resource library of more than 1,200 tools, templates, and planning resources; benchmarking studies and peer-to-peer knowledge sharing opportunities; CPE eligible webinars, roundtables, and networking events; and regular communications including E-bulletins, news publications, and weekly alerts.