Current Issues in Auditing

Volume 6, Issue 2
2012
Pages A1A14

American Accounting Association

DOI: 10.2308/ciia-50235

Hiring Recent University Graduates into

Internal Audit Positions: Insights from
Practicing Internal Auditors
Richard R. Clune and Audrey A. Gramling
SUMMARY: We survey practicing internal auditors on whether their organizations hire
recent university graduates as entry-level internal audit staff and, if they do, what factors
are important in their hiring decisions. Approximately 58 percent of the 273 respondents
hire, or plan to hire, recent graduates into their internal audit functions. Important factors
in the hiring decision include internal audit coursework, internship experience,
demonstrated communication and leadership skills, an accounting degree, and a high
GPA. The 42 percent of respondents that do not hire recent graduates indicated that the
primary reason was a need for auditors with prior audit experience.
Keywords: accounting curriculum; hiring decisions; internal auditing.

INTRODUCTION
For over ten years, auditing practitioners and academics have provided commentary and
analysis on the increasing growth in and importance of the internal audit profession (e.g., POB
2000; Gramling et al. 2004; Sumners and Soileau 2008), the need for academic curricula to better
prepare students for the internal audit workplace (Dickins and Reisch 2009), and students growing
interest in the internal audit as a career path (Sharifi and Khan 2010). Concurrently, the Institute of
Internal Auditors (IIA) has further developed its Internal Auditing Education Partnership (IAEP)
program.1 This program involves collaboration between the IIA and various universities with a
focus on helping to ensure that internal audit students entering the profession have the skills

Richard R. Clune is an Associate Professor at Kennesaw State University, and Audrey A. Gramling is a Professor at
Bellarmine University.
We appreciate feedback on a preliminary version of the survey from members of the Atlanta Chapter of the Institute of
Internal Auditors (IIA). We appreciate the internal audit professionals who took the time to complete this survey. We
thank Debbie Lasher and Elizabeth Nyaga for assistance with data analysis and Paul Sobel for helpful discussions.
Submitted: May 2011
Accepted: June 2012
Published Online: June 2012
1

See http://www.theiia.org/guidance/academic-relations/internal-auditing-education-partnership-program/ for

more information on the IIAs IAEP program. Also, see Sharifi and Khan (2010).

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necessary for success. As part of the IAEP, the IIA works with universities to encourage them to
provide appropriate internal audit educational offerings.
There is a growing interest within business schools in providing internal auditing in their
accounting curricula (e.g., Sharifi and Khan 2010). As business schools consider the development
and refinement of their internal audit-related courses and programs, it is useful to have current data
on what employers believe are important factors when hiring recent university graduates into
entry-level internal audit positions.
Our analysis is based on 273 responses to a mailed survey. Approximately 58 percent of the
practicing internal auditor respondents indicated that they hire recent university graduates into their
internal audit functions.2 These respondents provided their assessments of the factors that they
consider important in those hiring decisions. The findings generally support the importance of
criteria recommended in the IIAs suggested internal auditing program. However, the findings also
indicate the importance of additional factors, including demonstrated communication skills and
demonstrated leadership skills, suggesting that universities should provide opportunities for
students to develop these skills. Forty-two percent of the respondents do not hire recent university
graduates, with the primary reason being that they need experienced hires because they do not
have the resources to train inexperienced hires. In the next section, we provide additional
background and review relevant literature. We then present details on our data collection and
analyses, including implications of our results. We conclude with considerations for the internal
audit profession, internal audit educators, and internal audit researchers.

BACKGROUND AND LITERATURE REVIEW

Skills Needed by Internal Auditors
A number of studies focus on skills internal auditors already in the profession need for
success. For example, the IIA Research Foundation (i.e., Bailey 2010) published a report
providing practitioners insights on competencies that internal auditors already in the profession
should possess to perform successfully as practitioners. Bailey (2010) identified communication
skills as the most important attribute. Important knowledge areas included auditing, internal audit
standards, ethics, and fraud awareness (Bailey 2010). Similarly, Burnaby and Haas (2011) report
that chief audit executives considered communication, analytical skills, writing skills, conflict
resolution, and problem identification as important for staff internal auditors to successfully perform
their work. While insights from these recent studies are helpful, they do not directly address the
skills considered by those hiring new internal auditors directly from a university program.
Factors Considered When Hiring Internal Auditors
The IIAs IAEP program provides direction on courses, experiences, and credentials that
students who want to enter the internal audit profession should have as a part of an internal audit
education experience. Table 1 identifies these factors. Presumably, these requirements are based,
in part, on what employers perceive to be important when hiring entry-level internal auditors. The
2

Respondents included in this category are those who indicated that they have hired a recent university
graduate in the last 12 months, plan to hire a recent university graduate within the next 12 months, or would
hire a recent university graduate absent any budget restrictions. For brevity, we refer to these categories of
respondents as those who hire recent university graduates.

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TABLE 1
Internal Audit Program Requirements as Suggested by the Institute of Internal Auditors
Panel A: Core Curriculum Requirements






Principles of Internal Auditing

Ethics and Organizational Governance
Fraud and Forensics
Information Technology Auditing
Business Communication Skills for Internal Auditors

Panel B: Student Experiential Activities




Internship (or equivalent) experience

Interaction with faculty who have a CIA

Panel C: Student Credentials and Certications




Sit for the CIA exam

Complete an internal audit track/concentration/certicate

See http://www.theiia.org/guidance/academic-relations/internal-auditing-education-partnership-program/ for more information

on the IIAs IAEP program.

IIAs global model internal auditing curriculum indicates that the following core courses should be
part of a curriculum that prepares students for the internal auditing profession: Principles of Internal
Auditing, Ethics and Organizational Governance, Fraud and Forensics, Information Technology
(IT) Auditing, and Business Communication Skills for Internal Auditors.3 Furthermore, the IAEP
program stresses the importance of having one or more faculty members certified as a Certified
Internal Auditor (CIA) and highlights the need to provide opportunities for students to be involved in
internal, audit-related internship (or similar) experiences. The IIA guidance also stresses the
importance of preparing students to sit for the CIA exam and having a recognized educational
focus in internal auditing.
There is little academic research to complement the IIAs recommendations for developing an
internal audit program that is focused on preparing students to enter the internal audit profession.
We found very few studies that examined factors considered by those hiring entry-level internal
auditors. Seol and Sarkis (2005) developed an application of a multi-attribute model and
methodology for the selection of internal auditors. While they illustrated the methodology, they did
not provide insights specific to skills considered important when hiring new internal auditors. As a
further development, Seol et al. (2011) used a 1999 framework presented by the IIA to develop a
reduced set of skills required by new entrants to the internal audit profession. The IIAs framework
identified 56 skills, while Seol et al. (2011) reduced this to 11 skills. They highlight the importance
of communication skills for new internal auditors.
3

Additional details on the IIAs model curriculum can be found at http://www.theiia.org/guidance/

academic-relations

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Hiring Practices
Extant literature on hiring practices related to internal auditors is also very limited. Most
relevant is a study conducted by Alkafaji et al. (2010), who report that direct recruitment from
universities is the approach least used by organizations for staffing their internal audit functions.
They suggest that this finding may be attributable to organizations needing experienced auditors,
possibly because many organizations are not able to provide necessary training (also see Dickins
and Reisch 2009). As further evidence of hiring practices, Whitehouse (2011) reports that more
than half of internal audit organizations obtain their staff from transfers within the organization,
suggesting that internal audit is tapping internal talent, rather than bringing in new talent from
outside the organization.
We add to these growing literatures by obtaining insights from practicing internal auditors in
the U.S. on two important hiring decisions: whether they hire recent university graduates and, if so,
the factors that they consider important when hiring recent university graduates as entry-level
internal auditors.

DATA COLLECTION AND ANALYSIS

Survey Development and Administration
To obtain insights into factors considered important when hiring recent university graduates
into the internal audit function, we developed a survey listing potentially important factors. The
initial set of factors was based primarily on the IIAs IAEP guidelines. These factors generally can
be categorized as specific coursework/topics, relevant experiential activities, and credentials and
certifications. We supplemented this initial list in two ways. First, we added a factor for a course in
negotiations. This addition was based on various publications noting the importance of negotiation
skills for internal auditors (Moeller 2009; Bailey 2010) and the fact that such a course is available
on some campuses through either the business school (e.g., Kennesaw State University) or other
academic units (e.g., Oregon State University). Indeed, internal auditors need to know how to
negotiate. Internal auditors negotiate with auditees to improve cooperation, and they need
negotiation skills to improve acceptance of audit findings and recommendations. Second, we
added other credential and certification factors that often are highlighted in recruitment ads as
necessary or desired characteristics, including degree type and GPA.
We asked a focus group of Chief Audit Executives to review our initial list of factors. This focus
group recommended the addition of one factor that fits within the category of specific coursework/
topics. That factor was that students should understand the difference between internal and
external auditing. Furthermore, the focus group did not recommend that any factors be deleted.
The final survey comprised 17 factors that would likely be considered when hiring a recent
university graduate into the internal audit function.4 For each of the 17 factors, respondents
indicated their level of agreement as to whether the factor was important in hiring decisions at their
organizations (the five-point scale ranged from 2 strongly disagree to 2 strongly agree).
4

We recognize that additional factors may be relevant to the hiring decision, but our intent was to limit the
survey factors to maximize our response rate. Relying on the identified sources as a primary means of
selecting survey items allowed us to focus on internal audit-specific factors, but may not include all hiringrelevant factors identified in the student competencies/student hiring literatures. In the final section of the
paper, we further discuss the possible limitations of our approach.

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Given our methodology for including factors in the survey, we expected all of the factors to be
assessed by our respondents as important (i.e., mean greater than 0), but we had no ex ante
expectations regarding the order of importance of the 17 factors. In addition to asking for
responses to the 17 statements, we also asked respondents to provide any additional comments
that they considered relevant.5
We mailed the survey to 1,499 Chief Audit Executives at NYSE-listed U.S. companies.6
Twenty-three surveys were returned due to an insufficient address, with no forwarding information
provided. Of the remaining 1,476 surveys, we received 273 completed surveys (18 percent
response rate).
Respondents and Their Organizations
Panel A of Table 2 indicates that our respondents are primarily Chief Audit Executives or
Directors (89 percent). Further, the mean size (standard deviation; median) of the internal audit
function is 14 (30.28; 8) professional internal audit employees, with the size ranging from one
internal audit employee to 450 employees.7 Panel B of Table 2 indicates that the respondents
represent a wide range of industries.
Respondents Indicating That They Hire Recent University Graduates
One hundred fifty-nine (159) respondents (58 percent) indicated that they have hired recent
university graduates into their internal audit function within the last year or that they would consider
hiring them.8 In Table 3, we report the results relating to the importance of factors in internal audit
hiring decisions for these 159 respondents. Table 3 organizes the factors into the three categories
we discussed earlier: Specific Coursework and Topics (Panel A), Student Experiential Activities
(Panel B), and Student Credentials and Certifications (Panel C); within each category, we present
the factors ordered from highest mean response to lowest mean response.9
Panel A of Table 3 focuses on factors that can be most influenced by curriculum and program
choices made by those developing criteria for internal audit programs (e.g., the IIA) or those
developing or changing specific university internal audit programs (i.e., educators). Panel B
5

8
9

These additional comments represented optional feedback in which we asked the respondent to attach an
additional sheet with comments. We did not include a response box on the survey as our goal was to limit the
survey instrument to one page. Only 10 of the 159 (6 percent) respondents indicating that they hire recent
graduates provided additional comments. Because of this limited feedback, we do not provide detail on the
comments from these ten respondents. For the respondents indicating that they did not hire recent graduates,
we did provide a response box asking them to explain why they do not hire recent graduates. As we discuss in
the text, 113 of the 114 (99 percent) respondents not hiring recent graduates provided additional comments.
We use these additional comments to illustrate themes suggested by the responses to the survey statements.
While many companies not listed on the NYSE likely have internal audit functions, the NYSE requires its listed
companies to have an internal audit function. Thus, we limited our sample to NYSE-listed companies. We
acknowledge that our results may not be generalizable beyond NYSE-listed (i.e., very large) companies. We
discuss this limitation in the final section of the paper.
Two hundred fifty-seven (257) respondents provided information on the size of the internal audit function. One
respondent indicated 450 employees; if this respondent is excluded, the range of professional internal audit
employees is from 1 to 30.
See footnote 2 for an additional description of those hiring recent graduates.
Note that the survey statements were not presented in these categories or in a particular order, but were
included in the survey in a random order, with no categorization.

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TABLE 2
Demographics of Respondents
Panel A: Position of Respondents
Position

Number of Respondents
(%)

Chief Audit Executive or Director

244
(89%)
18
(7%)
2
(1%)
9
(3%)

Internal Audit Manager

Internal Audit Senior/Staff
Other
Total

273
(100%)

Panel B: Respondents Primary Industriesa

Primary Industry

Number of Respondents
(%)

Basic Materials

17
(6%)
45
(17%)
23
(8%)
27
(10%)
47
(17%)
18
(7%)
12
(4%)
19
(7%)
36
(13%)
4
(2%)
20
(7%)
5
(2%)

Financials
Oil & Gas
Utilities
Consumer Goods
Health Care
Technology
Consumer Services
Industrials
Telecommunications
Other
Missing
Total
a

273
(100%)

Categories based on Industry Classification Benchmark (ICB) categories listed at the NYSE website.

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includes factors that could be influenced by curriculum and program choices or could be influenced
by students individual actions (e.g., having an internship requirement in an internal audit program
or a student seeking such an experience, if not required). The factors in Panel C are influenced
primarily by the students own performance or choices regarding education and certification. A
review of Table 3 indicates that 15 of the 17 factors were perceived as important (i.e., mean
response significantly greater than the scale midpoint of 0) at the p , 0.001 level, one factor was
perceived as important at the p , 0.01 level, and one factor was not significantly different from the
scale midpoint of 0. Given the restricted range of responses (i.e., a five-point scale) and a
significance test that focuses on mean responses greater than the scale midpoint, we also provide
count data in Table 3. In discussing these results, we highlight significant factors (i.e., mean
response significantly greater than the scale midpoint of 0), where less than 50 percent of the
respondents indicated some level of agreement.
Specific Coursework and Topics
Panel A of Table 3 includes the seven factors related to coursework and topics. All of the
seven factors were considered important (i.e., mean responses greater than 0). The six factors
with a mean response greater than the scale midpoint of 0 at the p , 0.001 level include:
information technology course (mean 1.26, SD 0.78), ethics and/or organizational governance
course (mean 1.19, SD 0.90), internal audit course (mean 1.13, SD 1.00), understanding
the difference between internal and external auditing (mean 1.13, SD 0.94), a course in fraud
and/or forensics (mean 0.98, SD 0.84), and a course in business communications for internal
auditors (mean 0.78, SD 1.02). All five of the specific courses are recommended in the IIAs
IAEP guidelines. The IIAs guidelines are silent, however, on a negotiations course. The mean
response to the negotiations course was 0.17 (SD 0.85, mean response is significantly higher
than the scale midpoint of 0 at p , 0.01). Regarding coursework and topics, these results indicate
that the IIA-suggested courses are viewed as important by those audit professionals hiring entrylevel internal auditors directly from a university. In addition to the IIA suggested courses, students
might benefit from taking a negotiations course. However, as highlighted in Panel A of Table 3,
only 49 of the respondents (31 percent) agreed that a negotiations course was important.
Furthermore, it seems important to ensure that students understand the difference between
internal and external auditing.
Student Experiential Activities
Panel B of Table 3 includes five factors related to student experiences, with respondents
indicating that all five factors were considered important (i.e., mean response greater than the
scale midpoint of 0 at the p , 0.001 level) when hiring recent college graduates into an internal
audit position. The five experiential factors deemed important include: demonstrated communication skills (mean 1.62, SD 0.57), demonstrated leadership skills (mean 1.38, SD 0.65),
general business experience (mean 0.77, SD 0.88), internal audit experience (mean 0.73,
SD 0.90), and interaction with faculty having internal audit certification or experience (mean
0.41, SD 0.94). The IIAs recommendations highlight the importance of internal audit experience
through internship (or similar) experiences and stress the need to have faculty with a CIA
certification. The results in Panel B of Table 3 also suggest value in students having opportunities
to demonstrate communication and leadership skillsboth of which can be gained during work
experiences in either internal auditing or more general business positions. However, the
importance of student interaction with faculty having internal audit certification or experience
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TABLE 3
Importance of Factors in Hiring Recent University Graduates in Internal Auditing
Sorted by Category
Panel A: Specific Coursework and Topics
In Hiring a Recent College Graduate into
My Organizations Internal Audit Function,
It Is Important that the Graduate:
Completed a course in information technology (IT)

Completed a course in ethics and/or organizational

governance
Completed at least one internal audit course

Understands the difference between external

auditing and internal auditing
Completed a course in fraud and/or forensics

Completed a course in business communications

for internal auditors
Completed a course in negotiationsb

Meana
(SD)
[Median]
n 159
1.26***
(0.78)
[1.00]
1.19***
(0.90)
[1.00]
1.13***
(1.00)
[1.00]
1.13***
(0.94)
[1.00]
0.98***
(0.84)
[1.00]
0.78***
(1.02)
[1.00]
0.17**
(0.85)
[0.00]

2

1

14

75

66

33

48

74

29

45

74

33

51

69

36

71

46

52

47

47

16

86

41

2

1

50

104

74

74

44

73

31

52

63

33

Panel B: Student Experiential Activities

In Hiring a Recent College Graduate into
My Organizations Internal Audit Function,
It Is Important that the Graduate:
Has demonstrated through work experience and/or
extracurricular activities strong oral and written
communication skills
Has demonstrated through work experience and/or
extracurricular activities strong leadership skills
Has some business experience outside of internal
auditc
Has worked as an intern or professional in an
internal auditing position

Meana
(SD)
[Median]
n 159
1.62***
(0.57)
[2.00]
1.38***
(0.65)
[1.00]
0.77***
(0.88)
[1.00]
0.73***
(0.90)
[1.00]

(continued on next page)

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TABLE 3 (continued)
In Hiring a Recent College Graduate into
My Organizations Internal Audit Function,
It Is Important that the Graduate:
Has interacted with at least one faculty member
who has experience and/or certication in
internal auditingb

Meana
(SD)
[Median]
n 159
0.41***
(0.94)
[0.00]

2

1

79

44

21

2

1

23

55

73

19

76

52

54

55

38

14

65

49

23

20

29

61

42

Panel C: Student Credentials and Certications

In Hiring a Recent College Graduate into
My Organizations Internal Audit Function,
It Is Important that the Graduate:
Has an undergraduate or graduate degree in
accounting
Has a high GPA, regardless of majorc

Has begun studying, or plans to study, for the CIA

exam
Completed an internal audit track/concentration/
certicate at the undergraduate or graduate
levelb
Has a graduate degree in business (other than
accounting)

Meana
(SD)
[Median]
n 159
1.19***
(0.93)
[1.00]
1.05***
(0.89)
[1.00]
0.70***
(1.01)
[1.00]
0.42***
(0.99)
[0.00]
0.08NS
(1.06)
[0.00]

**, *** Indicates that the mean response is significantly higher than the scale midpoint of 0 at the p , 0.01 and p , 0.001 levels,
respectively.
a
Response Scale: 2 strongly agree; 1 somewhat agree; 0 neither agree nor disagree; 1 somewhat disagree; 2
strongly disagree.
b
Indicates that n 158 observations for this factor, due to nonresponse.
c
The count data for this factor totals 158, although 159 participants provided responses. One participant provided a response
that included two responses (0 and 1); we coded this response as 0.5 and it was included in the statistical analyses.
NS indicates that the mean response is not significantly different from the scale midpoint of 0.

appears to be somewhat limited. Only 65 (41 percent) respondents agreed that this interaction was
important in the hiring decision.
Student Credentials and Certifications
Panel C of Table 3 includes five factors related to student credentials and certifications, with
respondents indicating that four of the five factors were considered important (i.e., mean response
greater than the scale midpoint of 0 at the p , 0.001 level). The important factors included having
an accounting degree (mean 1.19, SD 0.93), having a high GPA (mean 1.05, SD 0.89),
planning to take the CIA exam (mean 0.70, SD 1.01), and completing a formalized internal
audit program, such as a concentration or certificate in internal auditing (mean 0.42, SD 0.99).
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The only factor that was not different from the scale midpoint was the student having a graduate
degree (other than accounting) in business (mean 0.08, SD 1.06). In fact, for this factor, only
49 (31 percent) of the respondents agreed that a graduate degree was important in the hiring
decision.
These results align with the IIAs guidelines that highlight the importance of the student taking
the CIA exam. However, respondents did not have a high level of agreement that completing a
formalized internal audit program (i.e., track, concentration, certificate) was important in the hiring
decision, with only 72 (46 percent) respondents indicating agreement with this factor. Furthermore,
while the IIA guidelines indicate that any disciplinenot just accountingwould be acceptable for
someone completing a specialized focus on internal auditing, our respondents seem to prefer an
accounting degree. Our results also emphasize the importance of a student having a high GPA.
Supplemental Insights from a Follow-Up Survey
Given that we used a short one-page survey to maximize our response rate, our survey did
not address a number of potentially interesting issues. To supplement our original survey, we sent
a short follow-up survey to the 40 respondents who both indicated that they hire recent university
graduates into the internal audit function and provided a usable email address.10 Table 4 lists the
questions that were included in the survey. We did not provide the respondents with any type of
response scale; rather, we asked respondents to provide written comments to each of the
questions. We received 13 responses (32.5 percent).
We recognize that employers might look for CPA-eligible candidates, rather than only those
pursuing a CIA certification. Therefore, we asked whether potential employers take into
consideration whether a student has satisfied the college credit requirements to become a CPA.
The results were mixed; six of the 13 respondents said that this was a rather important factor, five
indicated that it was moderately important (i.e., other factors would dominate the decision), and
two respondents indicated that the factor was not important.
One issue not addressed in our original survey was whether the hiring organization had a
rotation program. Such a program could be designed to better prepare inexperienced new hires for
an internal audit position, especially if it were designed so that the employees can gain exposure to
various aspects of the business prior to moving into an internal audit role. However, only one
respondent indicated that the organization had a formal rotation program; this program was
designed so that an employee first gets internal audit experience and then moves into various
finance and accounting roles, which seems to be descriptive of most internal audit rotation
programs (Christ et al. 2011).
A limitation of our original survey is that we did not obtain information on the type of work
performed by the internal audit function (i.e., whether internal auditors focus on assurance or
consulting services). It may be that the focus of an internal audit function influences hiring
decisions. In our follow-up survey, we asked respondents how their focus influences hiring
decisions. All but one of the 13 respondents indicated that their internal auditors were focused
more on assurance than consulting. The general consensus was that the focus of the internal audit
function was not an important factor in hiring decisions, with some respondents indicating that the
factors considered important in the hiring decision would be important for both assurance and
consulting work.
10

We thank the editor, Rich Houston, for making this suggestion.

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TABLE 4
Questions in Follow-Up Survey
In your hiring decisions, do you take into consideration that the student has satised the 150 hours (college credit) requirement to become a CPA?
Does your internal audit function have a rotation program?
What percent of your internal audit function is focused on assurance services versus consulting services? And how does that (assurance versus consulting) factor into your hiring decisions?
Do you hire non-business majors directly from college into your internal audit function, and, if so, what
majors do you prefer?
When hiring a recent college graduate, how important is it that the student comes from a college or university that promotes the internal audit profession (e.g., course offerings, internships, career fairs,
inviting employers for on-campus interviews)?
None of the questions included a formal response scale; rather, we asked respondents to provide written comments to each of
the questions.

Results from our original survey noted that respondents generally preferred an accounting
degree. Those results did not provide any evidence on whether non-business majors are hired
directly into the internal audit function. Our respondents to the follow-up survey indicated
overwhelmingly that, when hiring directly out of college, they hire only business majors and that the
preferred areas of focus include accounting, finance, and information systems.
The final point in our follow-up survey recognizes that employers may consider it to be
important whether the university that the student comes from is a university that promotes internal
auditing through various mechanisms, including course offerings, internships, and career fairs.
This need for explicit support of the internal audit profession is highlighted in the IIA IAEP program
framework that requires faculty to be members of the IIA and participate in relevant consulting or
research. Only four of the 13 respondents indicated that they would prefer students who come
from a university that explicitly supports the internal audit profession.
Summary Observations and Implications
Our results provide some important implications for a number of stakeholders involved in
internal audit education including: (1) professors and administrators considering initiating or further
developing internal auditing education offerings, (2) the IIA as it determines how to further develop
interest in and promote its IAEP program, and (3) university students considering a career path in
internal auditing.11 Results in Table 3 highlight that internal auditing program factors suggested by
the IIA are generally valued by internal auditors hiring recent university graduates, implying that the
five core classes recommended by the IIA (see Table 1) should be included in an internal audit
curriculum. While our survey did not address specific content that should be included in such
courses, for educators who want to implement such courses, the IIA does provide content
recommendations for each of these courses (see the IAEP framework at http://www.theiia.org/
guidance/academic-relations/internal-auditing-education-partnership-program/).
11

Our results also have implications for future internal audit research. We include this discussion in the final
section of the paper.

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Furthermore, educators developing or modifying internal audit programs may want to consider
factors not explicitly required by the IIAs framework. For example, while it is important that
students understand the differences between internal and external auditing, students who have
focused on one of these professions, to the exclusion of the other, may not understand the differing
roles and responsibilities. The respondents also valued demonstrated communication and
leadership skills in either work settings or extracurricular activities. Educators in internal audit
programs should explore how best to provide students with these opportunities.
Panel C of Table 3 has important implications for students. Students with a career goal of
being hired as an entry-level internal auditor directly from a university program will increase the
likelihood of being able to enter the profession by obtaining a degree in accounting, planning to sit
for the CIA exam, and demonstrating high educational achievement through a high GPA. Faculty
members can highlight the importance of these factors to students interested in an internal audit
entry-level position.
The results in Table 3 should provide points of consideration for the IIA with respect to its IAEP
program. Should an internal audit program that is designed to prepare students to enter the
profession have additional elements (i.e., students understand the differences between internal
and external auditing; students have demonstrated communication and leadership skills in either
work settings or extracurricular activities)? Furthermore, should the IIA encourage formalized
internal audit programs (i.e., track, concentration, certificate) or just provide guidance on
suggested coursework, topics, and experiences to universities that want to prepare students for
entry-level internal audit positions?
Respondents Indicating That They Do Not Hire Recent University Graduates
One hundred fourteen respondents (42 percent) indicated that they had not hired a recent
university graduate in their internal audit function in the previous 12 months and had no plans to do
so in the future. While this result may be discouraging to business schools that have, or plan to
add, internal audit courses into the curriculum, this result needs to be interpreted in light of the fact
that the study was conducted at a time of economic concerns, and thus may not reflect hiring
practices that are typical in more prosperous times. To illustrate this point, we note that one
respondent commented that, because of the state of the economy, experienced individuals could
be hired at reasonable rates, therefore reducing the attractiveness of recent university graduates.
Furthermore, our study does not consider that internal audit professional service firms and large
public accounting firms potentially would hire recent university graduates into entry-level internal
audit positionsour data do not address the extent to which such firms hire recent university
graduates.
We asked the 114 respondents who do not hire recent graduates into their internal audit
functions to briefly describe the reason for this practice, and 113 of the respondents (99 percent)
provided comments. By far, the most common reason provided for not hiring recent university
graduates was that the organization hired only experienced auditors, with prior experience in either
internal or external auditing (85 respondents, representing 75 percent of those not hiring).
Comments voluntarily provided by the respondents further illustrate this point. One respondent
indicated that entry-level internal auditors would not be appropriate as the staff auditors are asked
to lead audit procedures and generate results and findings. A general perspective is reflected in
the following respondent comment: Our small but experienced model does not allow for entrylevel auditors. Many comments reflected the need to have experienced auditors who were
seasoned in the audit process and could be immediately productive.
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Thirty-five respondents (31 percent of those not hiring) indicated that, while it would be
possible to hire recent university graduates, their organizations did not have the resources to
provide necessary or appropriate training and supervision for recent university graduates. Many
respondents commented that they prefer to hire experienced auditors from large CPA firms that
provide formal audit training.
We posit that an important difference between respondents who do and do not hire recent
university graduates is the size of the respondents internal audit function. Our data indicate that
the mean (SD, median) size of the internal audit department for non-hiring respondents is 8.9 (8.7,
6), while the mean size (SD, median) of the internal audit department for hiring respondents is
17.52 (38.6; 9).12 This difference in size is likely associated with differences in the resources
available to provide appropriate training and supervision of newly hired internal auditors (Dickins
and Reisch 2009).

CONCLUSIONS
Our survey of practicing internal auditors at NYSE-listed organizations provides some helpful
insights for the internal audit profession and for business schools that offer, or plan to offer, internal
audit courses and programs. We find that over half of the respondents hire entry-level internal
auditors directly from university programs. This finding suggests that entry-level hiring is more
prevalent than indicated in prior research. If entry-level hiring is expected to continue or grow,
universities should work with practitioners and the profession (e.g., the IIA) to develop students
with characteristics that will allow them to be successful when participating in the hiring process.
Our survey results, in conjunction with the IIAs IAEP guidelines, provide a starting point for these
discussions.
The results of our study are subject to several limitations. First, our survey of NYSE-listed
organizations resulted in obtaining responses from organizations that may differ in important ways
from other organizations with internal audit departments. For example, the NYSE includes some of
the largest public companies; small start-companies would not list on the NYSE due to
requirements related to market capitalization and revenue. Smaller and potentially riskier
companies would typically be found on other exchanges (e.g., NASDAQ, AMEX) or may not be
publicly traded. Hiring decisions at NYSE organizations may differ from hiring decisions at these
other types of organizations. Consequently, further research is needed to determine the extent to
which our findings are generalizable to non-NYSE organizations (i.e., other public companies,
non-public companies, governmental agencies, and non-profit organizations).
We speculate that hiring of recent university graduates may be greater at NYSE companies
than at other companies because the NYSE companies likely have more resources to hire and
train less experienced professionals. However, we readily acknowledge that this is an empirical
question and encourage additional research on the issue. Relatedly, we encourage caution in
generalizing the important factors identified in this study to companies not listed on the NYSE.
An additional limitation relates to the factors included in the survey. In an effort to develop a
brief survey, we likely omitted factors that could be considered important. For example, other
studies examining desired student competencies have found that additional skills, such as
interpersonal skills and problem solving/critical thinking skills, are important (e.g., Palmer et al.
12

p-value for difference in means (medians) is , 0.03 (, 0.01).

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2004). It is possible that omitted factors may have affected the results of the paper somewhat.13
Future research could provide insights on this issue.
Those respondents who did not hire recent university graduates overwhelmingly indicated that
this hiring decision was attributable to their need for experienced hires because they did not have
sufficient training resources. One issue that was not explicitly addressed by our respondents is
whether the formal training or the varied on-the-job training that external auditors typically receive
from the CPA firms is more important. Future research could address this issue.
Our follow-up survey provides additional preliminary insights. However, because of the low
response rate to this survey, we encourage future research that can provide additional insights. For
example, respondents to our follow-up survey were split on whether it was important, in the hiring
decision, for recent graduates to be eligible to sit for the CPA exam. These respondents also
indicated that the focus of the internal audit function (i.e., assurance or consulting) would not impact
the factors considered important in the hiring decision. Further research explicitly examining the
importance of these and other factors in hiring decisions would add to this literature. Finally, as an
extension of this literature, we encourage researchers to examine the extent to which the factors
identified in this study as being important in the hiring decision translate into actual career success.

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13

We thank an anonymous reviewer for pointing this out.

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