A new study by KPMG highlights the profound impact of rapid digital transformation and technological advancements, particularly in artificial intelligence (AI), on internal audit practices within the Kingdom. The report identifies several key technology risks that internal auditors must address. Data privacy concerns are paramount as organizations increasingly rely on big data, cloud computing, and AI, necessitating vigilant protection of corporate and personal data from cyber threats. Additionally, regulatory compliance is crucial, with new laws requiring Saudi-owned data to be stored within the Kingdom. Internal auditors play a critical role in ensuring adherence to these regulations. The rise of AI and open data platforms also poses significant risks to data privacy, requiring auditors to understand and mitigate these challenges effectively. Furthermore, the rapid pace of technological and business process changes demands that internal auditors stay updated on the latest developments to ensure effective control measures are in place. "Saudi Arabia is witnessing a swift digital transformation, prompting internal audit functions to transition from traditional manual processes to technology-driven approaches. This shift is vital for adapting to the evolving business landscape and regulatory requirements, ensuring robust control environments," commented Shadi Abuserryeh, Head of Financial Risk Management at KPMG. "Integrating AI-powered controls in core structures aligns with the Kingdom's Vision 2030, where AI is projected to generate US$90 billion globally, growing 45 percent." The report underscores the transformative effect of technology on internal audit practices, presenting both challenges and opportunities. The extent of automation being implemented and how embedding it across the operational framework has altered core processes proved instrumental during the Covid-19 pandemic, where the adoption of remote audits led organizations to integrate technology to streamline audit processes and minimize manual interventions. Collaboration between internal audit, IT, and risk management units has surged, enhancing audit practice effectiveness, with partnerships increasing from 55% to 79% in 2020. Moreover, the continuous development of technical skills among internal auditors is essential to address emerging technology risks and leverage AI-powered solutions effectively. "Despite the hurdles, internal audit functions must evolve to keep pace with technological advancements," added Abuserryeh. "Business leaders should adopt innovative tools and strategies to mitigate risks and capitalize on opportunities, ensuring that internal audit remains a critical partner in organizational success." The report also highlights the importance of continuous monitoring and real-time data analysis. With advancements in AI and machine learning, internal auditors can now revamp the practice and step up in the game by using data analytics to process larger data files faster while unlocking pervasive insights on logical trends. Looking ahead, the report emphasizes the need for internal auditors to embrace technology and adapt to the dynamic business environment. By leveraging mature IT infrastructures, robust governance frameworks, and advanced tools like data analytics, internal auditors can provide valuable insights and ensure organizational success.
