Half of audit leaders adopt AI, but governance lags behind

Wolters Kluwer, in collaboration with the Internal Audit Foundation, has published a report exploring the implementation, use, and governance of Generative AI (GenAI) within organisations and internal audit functions.

The report reveals that 50% of the surveyed internal audit leaders confirmed their organisations have partially or fully implemented GenAI. Despite this, only 17% reported having an organisation-wide policy governing the use of GenAI, highlighting a significant gap in regulatory frameworks. Frans Klaassen, Senior Vice President and General Manager of Wolters Kluwer Audit & Assurance, stated, "The findings of our research show that AI represents a dual opportunity for audit teams: helping safeguard the use of AI within their organisations, and leveraging the technology to benefit and enhance audit operations. The time to seize this unique opportunity is here. Internal audit is well-positioned to provide supporting advisory services on AI adoption, governance, and controls. To realise the transformative potential of AI, auditors will need access to advanced, secure technologies to optimise their operations. We are committed to continuous innovation and excellence in product development to support audit teams globally."

Anthony Pugliese, President and CEO of The Institute of Internal Auditors, noted the importance of skill development, stating, "With 76 percent of internal auditors identifying as novices or beginners in using GenAI tools, professionals must upskill and enhance their proficiency as organisations increasingly adopt this technology. By exploring the integration of GenAI tools into audit practices, practitioners can gain insight into the risks and potential benefits this technology presents to organisations."

The report also disclosed that 76% of audit leaders consider their GenAI skills to be at a novice or beginner level, indicating a significant opportunity for upskilling. About 7% of audit leaders indicated their organisations are in the advanced or full stages of GenAI implementation.

The survey shows that large companies with over 50,000 employees tend to favour organisational-wide AI governance, with 37% adopting this approach compared to 22% for department-led governance. This contrasts with smaller companies (500 employees or fewer) where department-led governance was noted at 19%, compared to only 11% with a broader organisational policy.

Approximately 26% of auditors are already using AI within their audit activities, while 36% are examining future applications. Remarkably, 31% of respondents are auditing the use of AI within their organisations or providing advisory services on AI projects. Planning, reporting, and fieldwork were identified as the main areas where GenAI is used or intended to be used, cited by 78%, 75%, and 72% of respondents, respectively.

The research conducted involved a survey targeting internal audit leaders worldwide, which took place in May 2024 and received 924 responses.