The adoption of artificial intelligence technology in audit functions is on the rise, increasing from 8% to 21% in only one year, according to a new report.
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The report found that 39% of enterprises are expanding artificial intelligence and machine learning skills for auditors. However, even though over half (53%) of companies are deploying AI, fewer than 30% feel prepared for the governance requirements.
"Certainly AI is pervasive," said Richard Chambers, senior risk and audit advisor at AuditBoard and former president and CEO of the Institute of Internal Auditors. "You can't turn anywhere that people aren't talking about it, that it isn't impacting what they do and how they do it."
He sees that as the overarching message for internal auditors. "AI is going to fundamentally transform what you do and how you do it," said Chambers. "In many ways, AI is already capable of performing many of our legacy processes — gathering and collecting data, analyzing it, drawing conclusions, creating reports. If you think about what the traditional role of the internal auditor has been, that's it in a nutshell. If it's just a matter of continuing to do what we've always done, then we will probably be relying more and more on AI to do it."
He believes the situation presents an opportunity for a reassessment of the auditor's role. "It's a clarion call for internal auditors to to step back and say, what are our superpowers? What are the things that we can do and that we have that the innate capabilities that a really good internal auditor has that we need to bring forward and really showcase in the way we carry out our roles, things like professional skepticism, intellectual curiosity, critical thinking, building and sustaining relationships, negotiating," said Chambers. "Those are skills that AI hasn't mastered. It's still very much at the command of the person giving it the prompts and telling it what direction it wants them to go. We have to realize what really makes us unique and what really drives the value proposition for internal audit, and that has to become essential in defining ourselves and in the way we carry out our work."
Many auditors are still in denial about AI's potential. "My big fear right now is that a lot of internal auditors have still not woken up to the potential that AI has," said Chambers. "I'm not sure any of us fully understand its potential, but I think there are still a lot of them who think that it's just another technology advancement."
The AuditBoard survey found AI acceptance rates declined by roughly 30% in July, following strong initial adoption in May and June, with decision-making times lengthening. "AI implementation is becoming a defining moment for every enterprise," said AuditBoard CEO Raul Villar Jr. in a statement. "Our research shows that the 'middle maturity trap' isn't a budget problem; it's an execution gap where inconsistent governance undermines the full promise of AI. To close this gap, businesses must make governance a continuous, shared habit across audit, risk and compliance teams."
