IIA Global Study Unveils Critical Trends Shaping the Future of Internal Auditing

The Institute of Internal Auditors (IIA) has released a report that sheds light on the future of the internal audit profession. Titled "Internal Audit: Vision 2035 – Creating Our Future Together," the study draws insights from over 7,000 practitioners and stakeholders worldwide, revealing key trends and challenges that will shape the profession over the next decade.

The report emphasizes the pivotal role of technology in transforming internal audit practices. An overwhelming 97% of participants anticipate that technological advancements will significantly increase both the complexity and volume of data available for analysis. Furthermore, 93% believe that emerging technologies will enhance audit functions' ability to develop more insightful recommendations for stakeholders.

Artificial Intelligence (AI) is highlighted as a particularly impactful technology. While participants agree on AI's potential to aid in developing more in-depth insights, the study reveals a current gap in implementation. Less than half (48%) of respondents reported active involvement in AI-related activities, suggesting a significant opportunity for growth in this area.

Anthony Pugliese, President and CEO of The IIA, stressed the urgency of embracing technological change. "Internal audit must rapidly transform or risk becoming irrelevant to stakeholders," Pugliese stated. He emphasized the need for the profession to shift focus from viewing technology as a risk to leveraging it for optimizing operations and expanding capabilities.

Expanding Advisory Services

The Vision 2035 report also underscores the growing importance of advisory services within the internal audit function. A significant 79% of participants agreed that advisory work will become increasingly essential and play a larger role in internal audit plans.

The study identified key areas where internal audit functions can provide the most value through both assurance and advisory services:

1. Operations and processes (87%)
2. Compliance (82%)
3. Risk management (77%)

Warren Stippich, Jr., President of the Internal Audit Foundation, highlighted the evolving expectations of stakeholders. "Our stakeholders already expect more from the internal audit function, including being versatile and agile to provide a broader array of support inside the organization beyond traditional assurance," he noted.

Challenges and Opportunities

The report also identified several challenges facing the profession:

1. Independence and Objectivity: While 53% of respondents said their organizations understand the importance of independence, 45% reported that their organizations only moderately understand or do not understand its importance.
2. Public Perception: Half of the respondents cited being misunderstood or undervalued as the greatest challenge for the profession. Additionally, 45% indicated a need for more support from leadership and stakeholders.
3. Talent Pipeline: The study revealed barriers to entering the profession, including inadequate networking opportunities (33% of students), lack of mentorship (28%), and misconceptions about career opportunities (28%). Educators pointed to a lack of awareness and understanding of the profession as a major barrier (54%).

The IIA's Role in Shaping the Future

The Vision 2035 report serves as a roadmap not only for practitioners but also for The IIA itself. The organization has outlined several priorities to support the profession's future:

1. Continued global advocacy through networking with regulators and key stakeholders
2. Producing insightful research and cutting-edge resources
3. Offering educational opportunities to help audit functions embrace emerging trends
4. Promoting professional certifications such as the Certified Internal Auditor® (CIA®) and Certified in Risk Management Assurance® (CRMA®)
5. Implementing the Global Internal Audit Standards, effective January 2025

The Vision 2035 report's findings are based on extensive research conducted over a 12-month period. The study incorporated feedback from a diverse range of participants, including internal auditors, IIA leaders, board members, audit committee chairs, C-suite executives, regulators, educators, and students. The research also analyzed social media data, industry and academic literature, visioning publications, and trend reports.

Implications for the Profession

The Vision 2035 report paints a picture of a profession at a crossroads. As technology continues to reshape the business landscape, internal auditors must adapt and expand their skill sets to remain relevant and valuable to their organizations. The emphasis on advisory services and the need to leverage emerging technologies like AI presents both challenges and opportunities for practitioners.

For the internal audit profession to thrive in the coming years, it must address the challenges of public perception, talent pipeline, and the ongoing need to demonstrate value to stakeholders. The IIA's commitment to providing resources, advocacy, and professional development opportunities will play a crucial role in supporting this transition.

As organizations navigate an increasingly complex risk landscape, the internal audit function has the potential to become an even more critical strategic partner. However, realizing this potential will require a concerted effort from practitioners, stakeholders, and professional bodies like The IIA to embrace change, invest in new skills, and continually demonstrate the value of internal audit in the modern business environment.

The "Internal Audit: Vision 2035" report serves as a call to action for the profession, outlining a path forward that balances traditional assurance responsibilities with expanded advisory capabilities, all underpinned by technological innovation. As the profession moves towards 2035, the ability to adapt to these changes will likely determine its relevance and impact in the years to come.

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