Project 2 Part 2

[Name]

University

[Course]

[Professor]

[07/21/2026]

Trends in the Internal Auditing Industry

The internal audit profession, especially in accounting and finance, is rapidly changing as technology, regulation and organizational expectations converge. The internal auditor, who was once viewed as a compliance checker, is now expected to be a strategic partner in risk management (The Institute of Internal Auditors, 2020; Doris & Olaoye, 2024). Research into the profession reveals three trends that are transforming the practice of internal auditing. The first trend is the increasing use of AI tools and generative AI (Solis, 2025). Another one is the rising importance of data analytics from an additional skill to a core competency (Lombe, 2025); and lastly, the changing nature of the audit scope due to new global standards and new areas of risk such as cybersecurity and environmental, social, and governance (ESG). All these developments indicate that internal auditors need to broaden their technical and strategic competencies to stay relevant continually.

Discussion of Three Trends

Artificial Intelligence and Generative AI Adoption

AI is no longer a new technology, and generative AI (Gen AI) is now part of the internal audit practice. While the use of generative AI tools has accelerated, with nearly 41% of chief audit executives (CAEs) using the technology, very few internal audit functions are ready to provide assurance or advisory services for AI systems implemented in other parts of the organization (Gartner, 2024). This gap is significant because internal audit is being called upon more and more to review and monitor things that they do not fully understand and that have been automated with AI. The trend is an indicator that AI is no longer a luxury for the profession; auditors, who are not yet AI literate, are at risk of trailing the technology they are responsible for auditing and the other firms that have embraced AI in planning, testing, and reporting. This dependence on sophisticated technology is linked to another, related trend, that of data analytics as a fundamental auditing skill.

Data Analytics as a Core Competency

Expanding Scope Driven by New Standards and Risk Areas

The Institute of Internal Auditors (IIA) published new Global Internal Audit Standards (GIAS) in January 2025 that have elevated the standards for audit functions to be aligned with organizational strategy and demonstrate value. Meanwhile, internal auditors are also expected to cover new areas of risk, like cybersecurity, data privacy, and ESG accountability, alongside more time-tested financial and operational risks. This has expanded the role of the audit function to be more of a forward-looking advisor for leadership in order to anticipate risk prior to its event, not just a watchdog to ensure compliance after it has occurred. This trend is a warning to accounting-focused internal auditors that their traditional knowledge of accounting is no longer enough to succeed long-term in the profession.

An Important Emerging Issue Comment by Kathleen Hogan: This is where the next section begins. In this section you will identify an emerging issue or problem within your industry. This could be one of your three trends, or it can be related to the industry. This section will be around 2-3 double-spaced pages.

This section begins with an introductory paragraph that identifies one of the 3 trends in the previous section as the most important emerging issue or problem in your opinion and makes a claim about its significance in your industry.

For the rest of the paper, you will develop an argument that supports this claim (clearly stated in your introduction). The body paragraphs need to describe and justify your proposed approach to the issue and explain how it relates to how other organizations or experts have addressed the same issue based on their research. When you present your argument, you should also be prepared to anticipate and refute counterarguments or alternative approaches. By showing that you understand other approaches and being very clear about how your approach is preferable, you are more likely to make a compelling argument.

Use information from your sources to support your ideas while ensuring that your own voice and ideas are primary in the paper. Again, be sure to include in-text citations when you are using ideas from your sources. If you include any quoted material, please include the location of the material as well as the author and year (Hogan, 2021, p. 2). Do not rely on quoted material. This paper should represent your thoughts based on a synthesis of ideas that contributed to your thesis.

Continue to describe and justify your proposed approach to the issue and explain how it relates to how other organizations or experts have addressed the same issue based on research.

Continue to describe and justify your proposed approach to the issue and explain how it relates to how other organizations or experts have addressed the same issue based on research.

You may not have a third theme or may need an additional Level 2 headings for more themes – adjust the template as needed.

Conclusion

Based on the above discussion of three trends and a deeper discussion of the issue you identify as the most important of the 3, this section will consist of 1-3 paragraphs that provide conclusions about the trends, the emerging issue, and their overall impact on the direction of the industry. You may discuss areas of uncertainty that require further research, but do not introduce anything new here except to make focused conclusions about the trends and issue based on your synthesis of the ideas from your resources and your own thoughts. Well done!!!

References

Doris, L., & Olaoye, F. (2024, December 2). Examining the shift from compliance-based audits to a more advisory, risk-focused ROLE within organizations. ResearchGate; unknown. https://www.researchgate.net/publication/386343001_examining_the_shift_from_compliance-based_audits_to_a_more_advisory_risk-focused_role_within_organizations

Gartner. (2024). Gartner survey shows 41% of Internal audit teams use or plan to use generative AI this year. Gartner. https://www.gartner.com/en/newsroom/press-releases/2024-03-11-gartner-survey-shows-41-percent-of-internal-audit-teams-use-or-plan-to-use-generative-ai-this-year

Lombe, M. (2025). How Data Analytics is Making Traditional Audit Obsolete. Isaca. https://www.isaca.org/resources/news-and-trends/newsletters/atisaca/2025/volume-4/how-data-analytics-is-making-traditional-audit-obsolete

Solis, L. F. J. (2025). Internal audit trends for 2025: Increasing demands for Strategic alignment, skills, and assurance. Optro.Ai. https://optro.ai/blog/internal-audit-trends-for-2025-increasing-demands-for-strategic-alignment-skills-and-assurance

The Institute of Internal Auditors. (2020). Transforming internal audit: From Compliance checkers to Strategic partners. Iia.Org.Sg. https://iia.org.sg/resources/iias-blog/november2024