The report highlights 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 leaders 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 per cent of leaders express confidence in their teams’ ability to effectively audit AI risks, and 63 per cent of organisations 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 recognised 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 scepticism and inquisitiveness

• Relationship-building and communication

• Ethical judgment

• Critical thinking

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

For strategic recommendations for internal audit leaders for 2026 and beyond, download the full 2026 Focus on the Future report.