The internal audit profession is facing a transformation driven by technological advancements, emerging risks and dynamic business landscapes. In response, the Institute of Internal Auditors’ (IIA) Internal Audit: Vision 2035 Report sheds light on the evolving responsibilities and strategies of internal audit functions. Internal auditors can no longer be just compliance enforcers; they must shift their perspective to become strategic advisors who offer valuable insights and business solutions.
The Changing Role of Internal Audit
Internal auditors have traditionally been viewed as assurance providers, tasked with assessing the adequacy and effectiveness of governance, risk management and control processes within organizations. However, the nature and scope of audits have evolved, and internal auditors must be able to offer insights and foresight that enhance organizational capacity to create, protect and sustain value. According to the Vision 2035 Report, the future of internal audit is being shaped by technological innovation and collective efforts to address global challenges.
By leveraging advanced analytics, generative artificial intelligence (GenAI) and digital platforms, internal auditors will provide robust, evidence-based assurance and forecast organizational trends with unprecedented precision. Adopting this comprehensive approach will allow internal auditors to provide boards with accurate and strategic advice, enabling organizations to thrive in an ever-changing world.
Balancing Assurance and Advisory
One of the key insights from the Vision 2035 project is the need to shift the balance between assurance and advisory engagements. Currently, internal auditors spend an average of three-quarters of their time on assurance services. However, this is expected to decline to 59% by 2035, with the remaining 41% devoted to advisory services.
Internal auditors currently spend about three-quarters of their time on assurance services. But by 2035, this is expected to decline to 59%, with the remaining 41% devoted to advisory services.
This shift highlights the evolving role of internal auditors as proactive change agents who address risks and opportunities, rather than reacting to them. To achieve this balance, internal audit functions must integrate their organization’s strategy into their services. By offering value-added recommendations, they can strengthen governance, mitigate risks, and improve control efficiency and effectiveness.
Adopting this proactive stance will position internal auditors as trusted advisors who contribute significantly to the achievement of organizational objectives.
Harnessing New Technologies
New technologies, such as artificial intelligence (AI), machine learning and automation are also playing a critical role in transforming internal audit practices. These technologies will enable auditors to manage increasing volumes of complex data, enhance their analytical capabilities and provide deeper insights for recommendations.
Despite the optimism around AI, less than half of Vision 2035 survey respondents are currently utilizing AI. Embracing emergent technologies will better equip internal audit functions to add value, improve audit efficiency and expand advisory services. It is essential for internal auditors to continuously learn and adopt new technologies to stay relevant and effectively address the risks associated with digital transformation.
Expanding Skills and Expertise
The evolving role of internal audit demands a broader skill set. Internal auditors must develop competencies in areas such as cybersecurity, information technology, sustainability and strategic alignment to address the complex and varied risks their organizations face. Continuous learning and adaptability are crucial for internal auditors to navigate these challenges successfully.
Organizations can address the need for specialized skills by adding team members with the required expertise or by co-sourcing with external service providers. This collaborative approach will make sure that internal audit functions are equipped to provide comprehensive assurance and advisory services that meet the evolving needs of their organizations.
According to the Vision 2035 Report, adaptability and learning agility are crucial skill sets for internal auditors. Currently, 56% of internal auditors recognize these skills as essential, and this importance is expected to remain high, with 48% still valuing them in the future.
Enhancing Your Internal Audit Team
As mentioned in the Vision 2035 report, finding specialists outside your internal audit team can be a strategic move for organizations seeking to enhance their audit capabilities, access specialized expertise and manage costs effectively. The following factors should be considered as you evaluate your need to look to outsourced professionals:
- Assess Organizational Needs: Before enlisting the help of specialists beyond your own internal audit team, organizations should conduct a thorough assessment of their internal audit needs, identifying areas where external knowledge is required and determining the scope of outsourced services. Thought should be given to embedding professionals into your existing internal audit team rather than relying entirely on an outsourced partner, depending on the scope of the audit.
- Select the Right Resource: Internal audit teams should evaluate the various sources and capabilities of external specialists based on their experience, expertise, industry knowledge and ability to deliver high-quality audit services. Note these resources could be within a company’s own IT department, an existing third-party relationship or a firm with focused areas of expertise.
- Define Clear Objectives: Establish clear objectives and expectations for the outsourced internal audit assistance, including specific deliverables, timelines and performance metrics. This will provide alignment between the organization and the external professional.
- Monitor and Evaluate Performance: Continuous monitoring and evaluation will help organizations assess the effectiveness of the services and make necessary adjustments. Organizations should review performance metrics, audit findings and stakeholder feedback to see that the services meet their needs.
Utilizing external providers allows organizations to tap into capabilities not available internally, improving the quality of audit services. It also offers cost savings and flexibility by eliminating the need for full-time staff and enabling adjustments based on changing priorities. Additionally, it helps organizations stay focused on their core operations while benefiting from external insights that strengthen risk management and governance.
How Cherry Bekaert Can Guide You Forward
At Cherry Bekaert, we offer Internal Audit Services that provide your organization with specialized knowledge, cost efficiency and flexibility. Our goal is to enhance your audit capabilities and improve your risk management practices.
As the business landscape evolves, so do your internal audit needs. Our experienced risk and compliance professionals are here to help you navigate these changes. We are equipped to create, protect and sustain value for your organization.
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