LAKE MARY, Fla., March 10, 2025 -- Internal audit functions that are more strongly aligned with overall organizational strategy are more likely to have sufficient funding. That's according to a new survey of senior internal audit professionals, released today by The IIA's Internal Audit Foundation, in partnership with AuditBoard, at the annual Great Audit Minds (GAM) conference in Orlando. The results underscore the value that internal audit functions provide when they play a strategic role within organizations, along with internal audit's expanding scope of responsibilities.
According to the 2025 North American Pulse of Internal Audit Survey, internal audit functions that are fully aligned with strategic objectives have a 31-percentage-point advantage in funding compared to those that are somewhat aligned. Underscoring the importance of strategic alignment, chief audit executives (CAEs) look forward to providing more advisory services in the future to respond to the strategic priorities. Currently, internal audit activity is comprised of 75% assurance and 25% advisory work for most functions. However, CAEs seek to increase advisory work to 40% going forward, according to last year's Vision 2035 report.
"Internal audit executives understand that closely aligning their activities with organizational goals allows them to play a more strategic role," said Anthony Pugliese, CIA, CPA, CGMA, CITP, President and CEO of The IIA. "Technology is the path of the future, with internal auditors integrating more tools to increase efficiency and effectiveness. This enables the profession to take on a broader role, meeting the demands of an evolving business environment and affirming our increasing importance and relevance."
A growing percentage of CAEs have responsibility for enterprise risk management (ERM) at their organizations – nearly one-third in 2024, compared to only 24% nine years earlier. Other common areas of responsibility are fraud (47%), Sarbanes-Oxley (SOX) (36%), and ethics/whistleblower programs (33%).
Technology and GenAI Implementation for Audit Activities
The percentage of CAEs reporting the use of GenAI for internal audit activities has more than doubled since last year, rising from 15% to 40%, highlighting the profession's growing adoption of technology.
When it comes to technology skills in general, data analytics are seen as foundational to internal audit activity. More than three quarters of CAEs said data analytics was the technology skill they most sought to enhance among staff, and more than 90% said adoption of data analytics was essential for the future of the profession. Beyond data analytics skills, other priority areas for staff development include communications and collaboration (53%), cybersecurity (51%), and IT (46%).
As the risk environment continues to demand new skills and knowledge from practitioners, The IIA continues to provide essential resources to help functions upskill and keep pace with the evolving risk landscape.
The Pulse report has been conducted annually since 2008, serving as a valuable resource for internal audit leaders to benchmark their progress against peers across multiple sectors including financial services, non-profit, public, and private sectors.
"The Pulse of Internal Audit report provides practitioners with invaluable insights into the state of the profession, highlighting key trends and shifts within internal audit functions across North America," said Warren Stippich, Jr., CIA, CRMA, CPA, President of the Internal Audit Foundation and National Managing Principal – Advisory Services Quality and Risk at Grant Thornton Advisors LLC. "The findings are an annual opportunity for CAEs and practitioners to assess their functions' priorities and operations against their peers and gain a deeper understanding of how they can continue to optimize their audit activities."
Additional Findings
Staff and Budget Trends
- Internal audit staff growth has stabilized to near pre-COVID levels. The percentage of functions with staff growth has stayed consistently around 25% since 2022. (For context, functions with staff growth dropped from 29% to 18% as a result of the COVID pandemic.)
- Last year, 34% of CAEs reported a budget increase, while only 11% reported a budget decrease.
- Nearly 70% of CAEs had to recruit to fill a new position or a vacant position last year. Even among smaller functions (4 to 9 FTEs), recruiting was necessary for nearly half of CAEs.
Audit Plan Priorities
- Operational auditing (19%), financial reporting (16%), and compliance/regulatory reviews (14%) tend to make up the largest portions of audit plans on average.
- Functions also consistently invest a large amount of effort toward cybersecurity and IT audits – with a combined average of 17%.
Outsourced Services
As the responsibilities of the internal audit profession diversify and expand, CAEs use outsourcing to expand capacity and obtain specialized skills.
- For respondents overall, outsourcing is used for cybersecurity (38%), IT (36%) and Sarbanes-Oxley (21%).
- For CAEs in publicly traded companies, the allocation for Sarbanes-Oxley rises to 54%).
- For CAEs in financial services, outsourcing for cybersecurity climbs to 49%, and IT to 53%.
Download the full Pulse Survey report.
Methodology
The 2025 North American Pulse of Internal Audit survey was conducted from October 3 to November 14, 2024. Respondents primarily came from organizations headquartered in the United States (85%) and Canada (10%), with the remaining 5% coming from the Caribbean or outside North America.
The report speaks to current conditions and long-term trends for internal audit budgets, staff, audit plans, risk assessments, and more.
About the Internal Audit Foundation
The Internal Audit Foundation is the preeminent global resource, in strategic partnership with The IIA, dedicated to elevating and empowering the internal audit profession by developing cutting-edge research and programs. The Foundation helps current and future internal auditors stay relevant by building and enhancing their skills and knowledge, ensuring organizations are equipped to create, protect, and sustain long-term value.
About The Institute of Internal Auditors and the Internal Audit Profession
Internal auditing is an independent, objective assurance and advisory service designed to add value and improve an organization's operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of governance, risk management, and control processes.
The Institute of Internal Auditors (The IIA) is an international professional association that serves more than 260,000 global members and has awarded more than 200,000 Certified Internal Auditor (CIA) certifications worldwide. Established in 1941, The IIA is recognized throughout the world as the internal audit profession's leader in standards, certifications, education, research, and technical guidance. For more information, visit theiia.org.
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