Embracing AI: The Future of Internal Audit in a Volatile World
Embracing AI: The Future of Internal Audit in a Volatile World
The internal audit profession is experiencing a significant transformation, driven by a multitude of pressures and the rising prominence of artificial intelligence (AI). According to the latest 2026 Focus on the Future report from AuditBoard, there is a compelling imperative for internal auditors to adapt and embrace AI to succeed in a hypervolatile environment characterized by rapid, interconnected risks.
The Current Challenges in Internal Audit
Recent findings indicate that internal audit leaders are grappling with three primary challenges:
1. Resource Constraints: Many audit departments are burdened with increasing responsibilities while facing stagnant or decreasing budgets. A staggering 43% of leaders reported no changes to their budgets for 2025 compared to the previous year, while 18% faced outright reductions. Moreover, 57% maintained the same staffing levels even as their mandates expanded, leading to potential burnout and ineffectiveness within teams.
2. AI Readiness: While AI technology has the potential to revolutionize the auditing landscape, only 39% of internal audit leaders believe it will significantly enhance their profession within the next five years. Alarmingly, a mere 28% feel confident about their capability to audit AI-related risks effectively, coupled with 63% of organizations lacking a defined risk appetite for AI use.
3. Identity Crisis: There exists a growing disconnect between how internal auditors wish to be perceived and reality. Over half of the respondents aspire to be seen as trusted advisors; however, less than 25% feel their current reputation aligns with this goal. This perception challenge could jeopardize the profession if auditors are relegated to mere compliance roles, a risk heightened by the increasing automation of basic compliance tasks.
Leveraging AI to Thrive
The unique attributes that distinguish exceptional auditors cannot be replicated by AI, emphasizing the need for personal skills in this domain. The 2026 analysis identifies the following critical competencies for auditors moving forward:
- - Professional Skepticism and Inquisitiveness: The ability to question assumptions and probe beyond surface-level inquiries.
- - Relationship-Building and Communication: Establishing trust and rapport with stakeholders is crucial for effective collaboration and impact.
- - Ethical Judgment: Auditors must navigate complex ethical landscapes, ensuring integrity remains at the core of their functions.
- - Critical Thinking: An analytical mindset is needed to dissect multifaceted issues and provide strategic insights.
By automating routine tasks through AI, auditors can refocus their efforts on value-added activities, transforming from compliance enforcers to strategic business partners. Richard Chambers, Senior Advisor at AuditBoard, elaborated on the urgency for internal auditors to leverage AI to automate repetitive duties, thereby freeing their capacity to engage in higher-order thinking and analysis.
Strategic Recommendations for 2026 and Beyond
To remain competitive, internal audit leaders must prioritize the integration of AI into their operations. The report recommends that teams actively pursue upskilling initiatives to enhance their capabilities in auditing AI and embracing this technology as a force multiplier. Notably, those departments that are proactive in their AI readiness will position themselves as indispensable resources for their organizations.
Furthermore, internal auditors must foster relationships across the enterprise, emphasizing their roles as trusted advisors. This approach not only enhances the perception of the audit function but contributes to a more engaged and risk-aware organizational culture.
Conclusion
As the audit landscape continues to evolve, the convergence of AI technology and an intricate web of global risks presents both challenges and opportunities for internal auditors. By embracing AI and refining their skill sets, audit professionals can navigate this hypervolatility and emerge as vital partners within their organizations, ensuring resilience and sustainability for the future.
For further insights and strategic guidance, download the complete 2026 Focus on the Future report from AuditBoard and join the movement towards transforming the internal audit function amidst evolving priorities.
Topics Business Technology）
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