Internal Audit or Nothing?

Having a job beats not having a job. And in your case (having to support yourself + no luck in AM/IB) you probably should take it.

Full disclosure: I don’t not work in internal audit, but I have dealt with my company’s internal audit group many times before and have 2 friends in this role.

But will internal audit give you relevant skills for AM/IB? NO.

Why? Because in AM/IB you have to analyze data and make strategic decisions. In internal audit, your basically checking the work of the corporate finance and accounting department and making recommendations related to GAAP, SOX regulatory, and compliance guidelines. A quick summary of internal audit is to help investors keep an eye on management and report to the board if something fishy is going on. Internal audit also works closely with a company’s independent auditor to collect information and test controls which would otherwise be too expensive to outsource. You can learn a lot on the job, but if your serious about breaking out (and I highly recommend you break out to another role asap) you need to learn as much as you can, network, and create opportunities for yourself. Going from internal audit to any other role is a tough, uphill battle but you can do anything if you set your mind to it.

BTW here’s a real world example based on my experience. I work for an AM firm and our internal auditors look at our trading positions (amongst other things). They aren’t concerned about our trading strategies nor about how we make money nor how much money we hope to make. Rather they care about: 1. When you price your inventory, are you getting independent pricing. (if inventory includes physical assets, internal audit will count them example: will count # of computers, bull dozers, head count, etc) 2. If we receive/send cash for buys/sells is that cash being recorded in the G/L on a timely basis, is there a bank statement which shows the money moving?
3. What kinds of systems are you using to keep track of positions and pricing. What kinds of reports can be run from these systems. Can you explain variances between these reports and your reported financials 4. Is there a separation in roles between the people who trade vs. the people who do the accounting vs. the people who manage cash

I hope this helps. Sorry for making it so long. I can add more but I don’t want to put you to sleep. Just keep a positive outlook and don’t stop working hard. I highly recommend you try to find a better role after spending a few months here – just remember you’re going to have to work harder than most people to break into other roles from internal audit)