You may think of an internal audit as a process that exclusively highlights areas where your organization needs improvement. Modern internal audits, however, also help you understand and prepare for current and emerging risks and opportunities.
As you confront new challenges, such as disruption from artificial intelligence (AI), the internal audit can be a powerful tool to help your company thrive, not just survive. Here are some risks to focus on and some internal audit trends that can help your organization become more resilient.
An internal audit is an in-depth analysis of your organization’s internal controls, corporate governance and accounting practices, done by an internal team or with the help of an external team. Internal audits help determine whether your organization is appropriately managing risk. While you may not be able to control your risks, being aware of and prepared for them helps you prevent or minimize their disruption.
According to the Institute of Internal Auditors (IIA) 2025 Risk in Focus Survey (and what we are seeing with our own clients), the top risks organizations face worldwide include cybersecurity, human capital management, regulatory change and more (see chart). Growing risks to watch for include climate change and digital disruption from technologies like AI.
You can expect internal audit needs in these areas to rise, as well.
Source: IIA 2025 Risk in Focus survey
Digital disruptions are the changes and challenges that come from the integration of digital technologies such as artificial intelligence in your organization. This impacts many areas of your operations — including cybersecurity, data privacy, regulatory compliance and overall business processes.
Digital disruption is a fertile area for internal audits because it can create both opportunities and risks for your organization. For example, on the opportunity side, AI can increase your efficiency and productivity by automating routine tasks and enhancing your decision-making capabilities. Risks include privacy concerns, cybersecurity, regulatory and legal challenges and more.
These new digital disruptions require close attention to data governance on your organization’s part. You must be aware and vigilant about your AI system’s collection and analysis of personal data, while understanding that an evolving legal and regulatory landscape may create compliance challenges.
To combat expanding risks, internal audits are continually evolving. Modern internal audit teams can deploy innovative technologies and software to help organizations strengthen processes and identify potential vulnerabilities.
Prominent trends in internal audits include:
These trends are interrelated.
Continuous monitoring (CM) is an ongoing collection of data in real time, or periodically, from various sources (financial systems, compliance databases or operational workflows, for instance). The goal of CM is to review business processes and performance standards and find and respond to risks proactively. CM often focuses on key performance indicators and key risk indicators.
Continuous auditing (CA) also involves ongoing data collection and analysis. Its goal is to ensure compliance with policies, procedures and regulations while helping your organization shift from cyclical reviews to continuous, proactive reviews. Keeping an eye on exception reports that include anomalies or deviations from established thresholds helps you respond sooner, so you can minimize any disruption. In short, continuous auditing supports better risk management and quicker response to issues.
Cybersecurity is a prime example of a risk that CM/CA can help your organization address. Continuous monitoring can detect unusual access or activity patterns, whether internal or external. By identifying these in real time, you can quickly respond to security breaches, potentially mitigating the impact.
Another advantage of CM/CA? You don’t need a person to select samples to be audited. Data collection software settings are programmed to help identify any issues proactively. That said, CM/CA systems do need some human oversight. No system is 100% accurate, so many require a kind of “ghost reviewer” to make sure the tool is functioning properly.
For example, say you’re using AI to examine all contracts for nonstandard clauses. The AI could miss such a clause or incorrectly categorize a contract — a potentially costly error. So, you would also want to have controls in place where a person would review contracts for nonstandard terms.
More companies are using CM/CA than even five years ago, but barriers to adoption remain. These include the cost of investment, internal resistance to change and data privacy/security concerns.
Another emerging trend is agile auditing. Traditionally, an internal audit consisted of planning, fieldwork, review and reporting. The client was basically in the dark until the audit report. With the more flexible agile auditing approach, your organization is more informed and welcome to provide feedback to the audit team and change plans of action based on information provided during an internal audit.
Agile auditing takes its name from agile software development and often works in “sprints” or short focused periods. It focuses on flexibility, collaboration and value for the stakeholders, identifying risks sooner.
For example, if your company identifies cybersecurity threats as a risk, an agile process can focus on your cybersecurity protocols first. This allows you to address any vulnerabilities and strengthen defenses before you move on to other risks.
Note: Ensuring that your agile auditing process is aligned with legal and regulatory standards is crucial to avoid risk.
AI and automated processes are increasingly being used by internal auditors for routine tasks such as pattern recognition and fraud detection. Using automation tools, internal audit teams can analyze vast amounts of data, identify trends, detect anomalies and improve risk assessments. This enables them to go beyond traditional sampling techniques and delve deeper into full data sets for more comprehensive, real-time auditing.
Auditors are also using predictive analytics to assess potential future risks, which allows you to take preventive action. For example, in financial services, predictive analytics can identify unusual transaction patterns that may indicate potential fraud or compliance violations before they escalate. By analyzing historical transaction data, machine learning models can flag anomalies and trigger early investigations, reducing financial and reputational risk.
Environmental, social, governance (ESG) audits help companies show regulators, investors and stakeholders their commitment to sustainability, social responsibility and good governance. An ESG audit is a comprehensive evaluation of a company's performance and practices in these three critical areas.
The purpose of these audits goes beyond reassuring stakeholders that an organization’s ESG disclosures are accurate and dependable. The audits also help ensure a company meets regulatory requirements/industry standards, while finding areas for improvement.
ESG audits can help your organization prepare for the impact of climate change by increasing your understanding of both your environmental and regulatory risks. These audits can also review your sustainability initiatives and assess your communication with stakeholders around climate change issues.
An underlying goal in all these internal audit trends is to limit severe interruptions to your organization’s functions, which is known as operational resilience. This resilience includes the prevention of potential and existing threats, as well as how your organization responds to them.
For instance, if your company has a cybersecurity breach, you need to consider how you respond both technically (closing the breach and preventing it from happening again) and operationally (meeting mandatory reporting requirements, informing customers and trying to rebuild shareholder and public trust).
An internal audit that makes use of modern tools, expertise and processes can help you achieve your resilience goals.
The risks your organization faces won’t stop evolving. But a comprehensive, strategic approach to internal audit can help you strengthen your operational resilience to mitigate their impact. Find out how our internal audit consultants can help you identify and manage risk more effectively and efficiently through customized support and innovative audit methodologies.
Our seasoned audit experts can help you streamline your audit experience and strengthen your financials. Contact us today for a free scoping call to assess your needs.
