Future Trends in Internal Auditing: Preparing for 2025 and Beyond

The business environment is ever-changing, and so is the role of internal auditing due to the changes in technology, business environments, and rising regulatory expectations. Looking at the scenario toward 2025, it is clear that the nature of internal audit has continued to change at a very fast pace. Organizations have to keep vigilant to retain their competitiveness and compliance, which entails the use of resources in technologies, training, and processes that enable auditing groups to respond to the ever-rising demands. Working with professionals like Dr. Sabine Charles at Charles Financial Strategies LLC helps organizations have the right tools and support to go through that change successfully.

Strategic Alignment and New Standards

The IIA released new revisions of the Global Internal Audit Standards in 2024, where a focus was placed on internal audit to be more strategic in its approach. The regulatory change means that CAEs need to create and execute broad strategies addressing internal audit, resources, technology, and assurance partners. This shift redefines the internal auditor as a strategic business partner that requires a focus on the organization’s goals to offer information that adds value for sustainable organizational performance.

Technological Integration and Skill Development

Internal audit is currently experiencing changes due to enhanced technologies such as artificial intelligence, data analytics, and automation. These tools allow auditors to filter through tremendous volumes of data and make correlations, as well as perform monitoring tasks. Though new technologies such as generative AI are adopted at a very fast pace, new threats arise, such as cyber threats and compliance, in which auditors need to have sufficient knowledge. A survey by Gartner shows that 76% of CAEs consider furthering the development of auditors’ data and analytics as a key priority, signaling that there is an important need for technological training.

Environmental Social Governance (ESG) Considerations

There are growing expectations over ESG matters that obligate internal audit to broaden its engagement to sustainability, ethical, and social responsibility concerns. This evolution means that the auditors have to get acquainted with ESG standards and frameworks to assess and report on the organizational performance in these areas. The ESG considerations incorporated with audit plans demonstrate a real appreciation for company accountability and disclosure.

Changing Risk Environment and Audit Focus

Today’s risk landscape is marked by increased levels of uncertainty and risk volatility, making it necessary for internal audit functions to be equally adaptable. Market risks like supply chain risks, inflation risks, and geopolitical risks need to be identified, and then the audit approach needs to be appropriately responsive. KPMG also notes that auditors should be prepared for potential problems and be able to quickly adapt their audit plans to minimize disruption, which again stresses the proactive approach of internal auditors.

Regulatory Developments and Governance

Due to repeated cases of corporate failures and accounting frauds, there has been a shift toward building a robust internal audit as a tool of good corporate governance. For example, the Chartered Institute of Internal Auditors recently launched a new Internal Audit Code of Practice, encouraging auditors to specifically consider risks associated with culture and climate change, AI and cybersecurity, fraud, and economic crime. Such development affirms the increasing responsibilities of internal auditors in the protection of organizational values as well as the administration of trust by stakeholders.

The Human Element in Auditing

As technology and strategic positioning take the stage, the human factor does not disappear from the picture of future auditing. Ethical judgment, critical mindset, and social interaction are attributes of an auditor beyond the ability of a machine. Thus, internal auditors can uncover subtle issues that cannot be easily solved through the use of technology while at the same time not overstepping their bounds and using excessive amounts of judgment.

Preparing for The Future

With the changing future of internal auditing trends, competition demands that organizations enhance technology, training, and flexibility of process. Dr. Sabine Charles at Charles Financial Strategies LLC helps in managing these changes.

Relative to strategic objectives, internal auditors ensure that practices are integrated, thus promoting achievement, sustainability, and organizational value in a volatile environment. This approach not only improves internal auditing but also the organization’s performance in general and helps it to adapt to a constantly evolving environment.

Source:

AuditBoard Blog: "Internal Audit Trends for 2025: Increasing Demands for Strategic Alignment, Skills, andAssurance"

Gartner: "Audit Top Priorities and Trends"

DataSnipper: "Internal Audit Trends to Watch in 2025"

KPMG: "Key Focus Areas for Internal Audit in 2025"

Reuters: "Internal Auditors Urged to Adopt New UK Code to Win Back Trust"