Rising governance issues in companies and increasing corporate frauds have led to a surge in demand for talent in the internal audit arm of audit firms and companies. 

Audit firms like Ernst & Young,PricewaterhouseCoopers (PwC) and Protiviti Consulting are ramping up hiring for internal audit and risk advisory functions. While the headcount at E&Y's internal audit arm has more than doubled to 1,250 from 600 over the past three years, the internal audit and risk advisory arm of PricewaterhouseCoopers has grown by 150% in terms of headcount over the past three years. 

Risk consulting and internal audit firm Protiviti Consulting has been growing at 40% year on year in terms of hiring since its inception in 2006. It hopes to maintain the same pace this year. Unlike statutory audit, which looks at the financial statements of companies as per accounting standards, has legal implications, is regulated by the Institute of Chartered Accountants of India, and is objective and external to a company, internal audit goes beyond numbers, and reviews all the internal processes and controls in a company and rectifies them with the business heads to mitigate risks. 

Internal auditors are regulated by the audit committee, the Institute of Internal Auditors and clause 49 of the listing agreement issued by Sebi. "Companies are emphasising on governance and holistic controls as opposed to strictly financial controls," says Ram Sarvepalli, partner and chief operating officer, advisory services at Ernst & Young. "Economic cycles are increasing the risk of fraud, and companies are increasing their spread of operations, which brings with it a new set of risks in forex and treasury. The increased risks require specialised skill sets and this explains the demand for talent in internal audit," he adds. (Economic Times)

Ernst & Young has recruited around 100 graduates for the internal audit arm this year. "We plan to recruit another 200 experienced certified internal auditors and MBAs this year," says Sarvepalli. "Companies are increasingly opting to outsource the internal audit function to audit firms," says Pankaj Arora, managing director of Protiviti Consulting.

"As businesses become more complex, companies are becoming global or are entering into mergers and acquisitions. They tend to outsource this function to professional firms as the global partners demand a higher level of assurance," he says.

Protiviti is witnessing a 40% year-onyear rise in hiring of internal auditors since its inception in 2006. The company has around 300 employees at its offices in Delhi, Mumbai and Bangalore. PricewaterhouseCoopers plans to ramp up hiring in its internal audit and risk advisory services at the rate of 20% this year. 

"The growth in size of Indian corporates and rising importance of better governance and risk management has led to a significant increase in demand for internal audit and risk advisory services in India," says Satyavati Berera, executive director, risk advisory services at PwC. The risk advisory practice in PwC has over 400 professionals and around two-third of these are in internal audit services. 

E&Y even tied up with ISB, Hyderabad for a two-year management programme primarily targeted at their internal audit and risk advisory professionals last year. "After working with us for a year, graduates can undertake this executive management programme in business operations and finance that will further enhance their skill sets," says Sarvepalli. Sarvepalli estimates the number of internal audit professionals in India to be between 5,000 and 8,000. This excludes auditors in banking and financial services.