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AUDITING

More North American companies rewarding internal auditors with pay raises, perks

 

By Neil Amato
January 10, 2013

Internal auditors—whose roles have increased in importance in recent years due to increased regulatory demands—were more likely to receive pay raises in 2012, and those with specialized skills and certifications received larger pay increases, according to new research.

The analysis, conducted by the Institute of Internal Auditors (IIA), also revealed that employers in North America are focusing more on work/life balance.

The annual Internal Audit Compensation Study showed that although the magnitude of raises was smaller than the previous year, a greater percentage of companies gave raises to all internal audit employees— 64% in 2012, up from 61% in 2011 and 28% in 2010 in the United States. In Canada, 83% of companies gave raises to all internal auditors in 2012, up from 56% in 2010.

Compared with 2011, fewer North American internal auditors received pay bumps of more than 3.9% in 2012.

The study of 311 companies showed that a higher percentage of internal auditors, compared with nonauditors, received salary increases—64% of organizations in the United States gave pay increases to all internal auditors, whereas 35% gave raises to all employees. In Canada, 58% of all organizations gave raises to all employees, compared with 83% that gave raises to the internal audit staff. The IIA previously released data showing that budgets for internal audit departments were on the rise.

“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,” IIA President Richard Chambers said in a news release.

The median salary of audit professionals has increased steadily, according to the survey. For example, U.S. chief audit executives’ median pay in 2012 was $160,000, compared with $145,000 in 2011. IT auditors’ median pay in the United States increased from $66,000 in 2011 to $74,300 in 2012 (see Exhibit 1 for details on other audit roles).

Auditors with professional certifications were paid more than those without certification. For example, the median internal audit salary for CPAs in the United States was $92,200. The median salary for internal audit employees with no certifications was $65,000. 

The study showed that internal auditors earned more if they specialized in IT; fraud and forensics; and environmental, health, and safety audits. That’s compared with those who perform financial and operational audits or engagements related to compliance and regulatory activities (see Exhibit 2 for more on specialties).

The report also indicated that companies are paying more to hire and hold onto employees. Companies in the United States and Canada reported that they increasingly used performance bonuses, increasingly paid above-market rates, and budgeted more money for merit increases to attract and retain employees in 2012.

The research also showed that more companies are offering paid time off, and more employees are being paid for working extra hours. In Canada, in particular, more companies are allowing flexible-work arrangements for employees.

Exhibit 1: Yearly Comparison of Median Audit Salary by Audit Role (US)

2012 2011 2010
Auditor $58,000 $55,450 $55,000
Auditor, Senior $74,985 $73,300 $72,500
IT Auditor $74,300 $66,000 $68,000
IT Auditor, Senior $85,500 $85,014 $81,207
Audit Manager $94,595 $92,250 $95,000
IT Audit Manager $105,775 $102,000 $99,000
Audit Director $124,822 $124,008 $125,000
IT Audit Director $139,000 $144,000 $134,850
Chief Audit Executive $160,000 $145,000 $132,000

Source: The Institute of Internal Auditors.

Exhibit 2: Yearly Comparison of Median Audit Salary by Area of Expertise (US)

2012 2011 2010
General auditing (financial and operational) $81,867 $80,336 $80,000
IT $96,000 $90,273 $89,000
Fraud and forensic auditing $91,499 $100,000 $92,250
Environmental, health, and safety $95,374 $100,500 $102,500
Compliance and regulation $83,706 $82,287 $76,059
Other $95,585 $91,529 $83,000

Source: The Institute of Internal Auditors.

Neil Amato (namato@aicpa.org) is a JofA senior editor.

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