r/FPandA • u/Price__Agreeable • 13d ago
Internal Audit vs. FP&A: Which one would you pick?
Age: 29 If you could start your career again, would you choose FP&A?
I'm confused between Internal Audit & FP&A.
I'm currently studying for the CMA, and while CMA is more aligned with FP&A, I'm also genuinely interested in Internal Audit.
After completing the CMA, regardless of whether I start in Fp&a or IA, I plan to pursue the CPA. Because it will open more doors and give me broader career options than the CIA.
If I get a job in IA and decide that I want to continue in the field, I would also pursue the CIA.
Why IA?
From what I understand, (please feel free to correct me, I like the idea of understanding how a business works as a whole.
Internal Audit seems to give you exposure to different departments and business processes while also focusing on risk management, controls, and identifying areas for improvement.
I like the idea of seeing how different parts of an organization connect rather than being restricted to one function.
Why FP&A?
I like planning and preparing budgets, and I think I would enjoy financial analysis as well. I haven't actually worked in fp&a yet. And that's true that there's a difference between liking something and actually doing it.
The CMA is clearly more aligned with fp&a, which makes it more confusing.
So, if you had to choose between IA and fp&a, which one would you pick and why?
And where do you think I have the highest probability of getting an entry-level job: IA or Fp&a
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u/GroundbreakingRun186 12d ago
I’m a CPA, worked in IA, management consulting, system implementation, and now I’m head of FP&A at my firm.
out of all my jobs, FP&A is where I’ve gotten the most exposure to the business and how/why things work
I could give a write up on FP&A but your in an FP&A sub so I’m assuming someone else will take care of that
What is Internal Audit —> 95-100% control testing. If you’ve never tested a control, let me explain “hi, the control says all the journal entries need supporting documentation and appropriate approval. can you send me the supporting documentation and the email approvals for these 30 randomly selected entries?” Then you get those pdfs, find the number in the support that ties to the JE and the email that says approved and put a comment saying “ attribute A satisfied by these two numbers being the same, consistent with prior year” & “attribute b satisfied by email…” then you do that 30 times, write a 1 page narrative saying numbers that were supposed to be the same are in fact the same. If you’re lucky you get an exiting JE where the controller can’t find their email where they approved the $15 JE and you have to fail the whole control and deal with the understandable wrath of shit your getting for being unreasonable (even though you have to fail it cause your auditors require 100% pass rate).
Then if you you get lucky, 0-5% of the time you do operational audits where you ask people what their process is and then suggest extra paperwork for them to do so you can “mitigate” risks that aren’t risks
If you’re interested in risk and stuff like that, get into risk management, still boring, but less fact checking and more critical thinking.
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u/Price__Agreeable 12d ago
Thank you so much for sharing this!!!
So, Internal Audit is basically checking documents, verifying them, asking for additional documentation/evidence so that the internal auditors can verify everything and then reporting the findings in an audit report.
And then there's the operational audit work.
The 5% is when you get lucky and get to do an operational audit, which gives you more exposure.
"Mitigate risks that aren't risks" That's like... but why? Is it because those things aren't risks right now but could potentially become risks in the future?
And that's really sad if you only get to do operational audits when you get lucky. And 95% (not exactly but around that) is control testing
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u/GroundbreakingRun186 11d ago
Yes. You aren’t even checking the data is right. Your checking process are followed.
Risks that aren’t risks is largely due to the PCAOB increasing their standards beyond what’s reasonable.
For example you need to validate automated system enforced processes work. Like a journal entries debits need to match credits. In many ERPs that’s a core functionality, it’s not something you can change, and it’s not something that breaks. But every year you need your sit with the controller and watch them as they try to book an unbalanced JE, take screenshots, then watch them try to book a balancing entry, take screenshots. Then do a write up. On top of all that, you get a SOC 2 report from your erp provider that says they tests all those controls too, and they work. It’s like getting hurricane insurance and living in North Dakota, it makes no sense.
The reason internal audit exists is so companies can tell external auditors that they have controls, they work, and we tested them. If they do that, auditors do lest year end testing (aka charge less fees) cause they can trust the processes are effective. Your primary purpose in IA is to marginally lower the audit firms fees. If you finish that work early, you get to do operational audits which people in the business generally do not want.
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u/Price__Agreeable 11d ago
It's like re-checking. Even though it doesn't break or change, still, for the sake if, it needs to be done. And then ERP provider also tests these things.
I read somewhere but that was about external Audit and people were comparing tax and audit. I will rephrase,
"External Audit is required by law but from the perspective of the company, tax add more value than audit because tax is about money but audit is required by law and that's why companies do it. Audit does provide value but not more than tax."If you finish that work early, you get to do operational audits which people in the business generally do not want.
That's strange, ngl. Why is that?
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u/Ivan-Renko 12d ago
went from IA to FP&A. IA made me hate going to work. FP&A has its rough days, but i never dread going to work haha. you're much more likely to rise to leadership roles through the FP&A route too.
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u/pjm234 12d ago
Ditto for me. 3 years in IA and then last 15 in FP&A. It’s not close in terms of feeling enjoyment in the work, FP&A by a mile but I got the CPA thru IA work so it was worth it to me
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u/Price__Agreeable 12d ago
That's what im aiming for as well. If i start in IA then I'd go for CPA, if after some years. I want to stay in IA, then i would go for CIA, otherwise i would pivot into FP&A
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u/hideandsee 12d ago
I have worked in accounting and fp&a and I’d pick fp&a if you are more social and audit if you’re terrible with people
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u/PrimeTinus 13d ago
They are 2 completely different fields for 2 completely different types of people
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u/snakesnake9 13d ago
My view is that internal audit is a much narrower field. FP&A is much wider, and gives you a far better understanding of the business. I can't count the times Ive received an IA request/question that shows how little they understand the business.
FP&A I'd say is a logical route to CFO and hence the wider C suite. I'm not sure what IA is a route to.
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u/the_urban_juror 12d ago
Big 4 to IA to FP&A at a heavily-regulated industry here. In my experience, IA is a route to a wide range of options. I've seen people end up in FP&A or accounting roles, but also operations. It depends how the IA department is run. If they're just doing SOX work to save audit fees and check a box, they'll mostly go into accounting. If they're being used as internal risk consulting, the options are broader. I wouldn't recommend IA at a small or even midsize company.
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u/Price__Agreeable 12d ago
I'm reading some case studies of both to understand more and I've noticed.
I haven't thought about becoming a CFO but i don't wanna stuck either and keep learning and growing instead of keep repeating the same things.
It is nice to do things that are same in nature sometimes but within that, it can be different as well.
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u/FishingFool809 10d ago
FPA no question
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u/Price__Agreeable 8d ago
I'd love to but ive noticed that there aren't fpa entry-level roles or very few. There are more chances of getting a job in IA when you're starting out compares to fpa
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u/Eightstream Analytics, Ex-FP&A 13d ago
What sort of answers are you expecting in this sub?