Significantly more internal auditors received salary increases last year, compared to the past several years, according to a new study by the Institute of Internal Auditors.
The number of U.S. organizations awarding raises to their entire internal audit staff increased from 60 percent in 2011 to 64 percent in 2012. In Canada, 83 percent of participating organizations gave raises to all their internal auditors in 2012 — a five-year high for the country. However, when compared to 2011, the magnitude of the raises has decreased, with fewer internal auditors having received a salary increase greater than 3.9 percent.
In both the U.S. and Canada, a larger percentage of internal auditors are receiving salary increases than non-auditors.
“This data suggests that organizations appreciate the critical role internal auditors play in helping boards, audit committees, and executive management navigate today’s escalating governance, risk, compliance, and control challenges,” said IIA president and CEO Richard Chambers in a statement.
The study analyzed salary data from 311 organizations in the U.S. and Canada that employ more than 1,800 internal auditors and predicted that an increased number of internal auditors will receive raises this year. Specialized skills and certifications are among the factors yielding higher salaries. Employers are also increasing their focus on work/life balance.
One reason why internal auditors are being recognized and rewarded may be due to the increasing regulatory and compliance demands placed upon them, according to the researchers. New requirements and reporting mandates have brought internal audit performance to the forefront of many organizations.
“The increased emphasis on regulatory compliance and financial controls makes internal auditing’s role today more important than it has ever been,” said one survey respondent.
The study results found that internal auditors who specialize in IT; fraud and forensics; or environmental, health and safety audits are earning higher salaries than those who perform financial and operational audits or engagements pertaining to an organization’s compliance and regulatory activities. This finding underscores the importance of specialty skills in determining compensation.
In addition, the researchers noted a correlation between professional internal audit certifications and higher salaries. In the U.S., internal auditors who are certified in one or more areas earn a higher salary than their noncertified internal audit peers. Specifically, practitioners with the Certified Internal Auditor (CIA) designation earned an average of $26,500 more than those without any professional certifications.
Canadian internal auditors also reported significantly higher median incomes than their noncertified counterparts.
“This finding has been consistent throughout the years, and we believe that it’s because employers recognize that professional certifications — especially the CIA — demonstrate an individual’s competence, knowledge, and ability to perform as an exemplary internal auditor,” said IIA professional certifications vice president Cyndi Plamondon in a statement.
In addition to the traditional recruitment strategies, researchers saw an increase in the percentage of organizations offering benefits to enhance employees’ work/life balance. For example, more organizations are offering paid time off. More employees are also being compensated for working extra hours. Wellness programs are becoming more popular, and more Canadian organizations are leveraging flexible work arrangements.