AuditBoard's AI Risk Management 2026 Report

13 Nov 2025

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AuditBoard report: Internal audit faces hyper volatility with interconnected, accelerating risks in 2026.
AI readiness lags: 63% of organizations lack AI risk framework, oversight structure.
Internal auditors urged to leverage AI, upskill teams to overcome resource limitations.

AuditBoard has unveiled its Focus on the Future 2026 report, shedding light on the evolving landscape faced by the internal audit profession.

According to the report, based on a survey conducted with 213 global internal audit pioneers, the industry must navigate a complex environment marked by the intertwined forces of limited resources, advancements in AI, and an evolving role definition.

Resource Constraints in Internal Auditing

Internal auditors are urged to address these resource limitations by adopting AI to amplify

Internal auditors are urged to address these resource limitations by adopting AI to amplify their capabilities and investing in team skill development to enhance their value.

This dual approach is deemed essential for adapting to the sector's next-generation demands. The report highlights key pressures impacting the field, focusing on the widening gulf between aspirations and current capabilities.

Challenges in AI Readiness and Governance

The audit sector faces significant challenges regarding AI readiness. While 39% of audit pioneers anticipate AI will significantly impact the profession within the next five years, only 28% feel confident in their teams' ability to assess AI-related risks effectively.

Additionally, 63% of organizations have yet to implement a formal risk appetite or governance framework for AI, leaving internal auditors without a comprehensive oversight structure.

Budget and Staffing Concerns

Despite growing faults, budgets for internal audit departments remain stagnant or shrinking

Another pressing issue is the resource paradox. Despite growing responsibilities, budgets for internal audit departments remain stagnant or shrinking, with 43% reporting no budget increase for 2025 over 2024, and 18% experiencing cuts.

Similarly, staffing levels have largely remained flat, with 57% maintaining the same full-time headcount even as responsibilities grow.

Perception and Identity in the Audit Profession

The report also uncovers an ongoing identity crisis within the profession. More than half of the respondents aim to be acknowledged as trusted advisors, yet only a minority feel their departments are currently seen in this light.

This perception gap is deemed a critical risk, as capabilities perceived only in terms of compliance may become obsolete with increased automation.

Essential Skills for Auditors

Despite the rise of AI, certain human skills remain irreplaceable for auditors striving for excellence

Despite the rise of AI, certain human skills remain irreplaceable for auditors striving for excellence.

These include professional skepticism, strong communication and relationship-building, ethical judgment, and critical thinking — skills identified as pivotal in setting top auditors apart from their peers.

Looking Ahead: Strategic Partnerships

Richard Chambers, Senior Advisor, Risk and Audit at AuditBoard, emphasized that internal audit is currently at a crucial intersection.

"To thrive amid hyper volatility, internal auditors should utilize AI to automate routine tasks, freeing up teams to focus on more specialized tasks and move beyond merely reporting what is happening to become the foresight-driven strategic partners the business needs," stated Richard Chambers.

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AuditBoard, the pioneering AI-powered global platform for connected risk, announced the findings of its 2026 Focus on the Future report, revealing the internal audit profession is navigating an environment of hyper volatility defined by accelerating, interconnected risks.

The survey of 213 global internal audit pioneers shows the profession is being challenged by three converging forces: persistently tight resources, the rise of AI, and a demand for role redefinition.

Overcome resource limitations

The report highlights that internal auditors must overcome resource limitations by leveraging AI as a capacity multiplier while simultaneously upskilling their teams to provide greater value.

This is the only way the function can thrive in this next-generation environment.

Key findings: converging pressures on the internal audit profession

The survey identifies a dangerous gap between aspiration and capability, driven by these core challenges:

AI readiness lags execution: Only 39 per cent of internal audit pioneers say AI will significantly transform the profession within five years. At the same time, readiness to provide assurance over AI lags behind adoption. Only 28 percent of pioneers express confidence in their teams’ ability to effectively audit AI risks, and 63 percent of organizations have not yet defined a formal risk appetite or governance framework for AI use, leaving internal auditors with little structure for oversight.
The resource paradox: Internal audit continues to face expanding responsibilities with stagnant or shrinking budgets. 43 per cent of respondents reported no change in their 2025 budgets compared to 2024, and 18 per cent reported reductions. Staffing levels followed a similar pattern, with 57 per cent maintaining flat full-time headcounts despite expanding mandates.
The identity crisis persists: Over half of the respondents aspire to be recognized as trusted advisors, yet fewer than a quarter currently feel their departments are perceived in this way. This is a critical vulnerability, as functions viewed purely as compliance enforcers risk being rendered irrelevant by automation.

Keeping a competitive edge

While AI can enhance efficiency, it cannot replicate the unique qualities that distinguish outstanding auditors. The survey identified the top skills differentiating auditors in 2026 and beyond:

Professional skepticism and inquisitiveness
Relationship-building and communication
Ethical judgment
Critical thinking

Risk for the future of the profession

Richard Chambers, Senior Advisor, Risk and Audit, AuditBoard, said: "Internal audit stands at a tipping point. The pressures outlined in the report create unprecedented risk for the future of the profession."

He adds, "To thrive amid hyper volatility, internal auditors should utilize AI to automate routine tasks, freeing up teams to focus on more specialized tasks and move beyond merely reporting what is happening to become the foresight-driven strategic partners the business needs."

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