Why Slow Tech Adoption is Internal Audit’s Biggest Risk Today

The future or rather, the present, demands internal auditors who are not just governance and control experts but are also digitally fluent, data-savvy and forward-looking. Yet, despite broad agreement on this, adoption remains painfully uneven.

According to the 2025 North American Pulse of Internal Audit Report, 92% of Chief Audit Executives (CAEs) believe data analytics is the most critical technology skill for the future – yet only 28% report high or advanced use of data analytics within their teams.

We’re dealing with a clear case of aspiration lagging behind implementation. This gap isn’t just a technical issue but also a strategic risk. And it's one that demands immediate and deliberate action by CAEs, Audit Committees and Boards alike.

The Case for Change

Traditional audit methods, rooted in manual sample testing and static reporting, are increasingly ill-equipped to keep pace with today's complex and fast-moving risk landscape.

Relying on lagging indicators and lengthy audit cycles often means that red flags are identified only after damage is done. Technologies like continuous controls monitoring and agile auditing allow for early detection and timely response.

Without these modern capabilities, audit functions risk being reactive rather than proactive, missing critical warning signs and undermining their value to governance structures.

The Imperative from the Standards

The Global Internal Audit Standards (2024), specifically Standard 10.3 on Technological Resources, leave no room for ambiguity:

• “The chief audit executive must strive to ensure that the internal audit function has technology to support the internal audit process.”

This standard doesn’t only recommend using technology, it requires strategic oversight, periodic evaluation, training and collaboration with IT and cybersecurity functions.

Moreover, limitations in technology must be transparently reported to senior leadership and the board.

Technology-Based Audit Techniques (TBATs)

Research by Eulerich et al. (2022) from the University of Duisburg-Essen and others sheds empirical light on the impact of technology-based audit techniques (TBATs).

Their findings provide great insights:

• TBATs enhance audit efficiency and effectiveness. Auditors using TBATs completed more audits, uncovered more risks, provided more recommendations, and reduced audit duration.
• Cost is the caveat. TBAT adoption is often associated with increased resource requirements, larger teams, specialised skills and investment in tools and training.
• The benefits are real but hard to quantify. CAEs struggle to articulate the financial return from TBATs, making business cases for investment a harder sell internally.

Still, the message is clear: technology enables better audits. The challenge is no longer about proving it works but about justifying the investment and bridging the skills gap to fully realise its potential.

Common Technologies Changing the Audit Game

According to the IIA and Vision 2035 insights, here are a few technological tools that are no longer optional:

• Audit Management Systems – streamlining planning, execution, follow-ups, and reporting.
• Data Analytics Platforms – empowering auditors to test full populations, identify anomalies and draw insight from complexity.
• GRC Systems – aligning risk management with assurance efforts across the business.
• AI & Generative AI Tools – already used by 40% of CAEs, with millennials leading adoption.
• Collaborative Platforms – critical in hybrid and cross-border teams.

Technology is not just making audits faster; it’s making them smarter, deeper, and more aligned with organisational strategy.

Common Barriers to Adoption

Despite the clear benefits of integrating technology into internal audit, many functions struggle to move beyond traditional tools and methods.

A key barrier is the lack of skills or capacity as many audit teams are not equipped to leverage advanced analytics or emerging technologies.

Budget constraints further limit investment in innovation, especially when value is not immediately visible.

Resistance to change, both cultural and individual, can stall progress, while the complexity of implementation is often underestimated.

Many still default to using Excel, not because it's the best tool for the job, but because it's all they know.

Strategic Considerations for CAEs and Audit Committees

To move from intent to impact, Chief Audit Executives must:

• Embed technology into the internal audit strategy, not as an IT add-on but as a core enabler.
• Build cross-functional partnerships with IT and data governance teams to ensure seamless integration.
• Champion technology funding by articulating risk reduction and value creation to the board.
• Upskill and reskill the team with relevant data science, cyber and tech audit capabilities.
• Report transparently on how tech limitations may affect audit quality or coverage.

In conclusion

To deliver on our promise in a world shaped by digital disruption, as Internal Audit we must upgrade our toolbox, our team and our thinking.

Technology is not a silver bullet, but it is a powerful lever. And for CAEs and audit committees bold enough to invest in it, the returns are more relevance, more influence and more impact.

The audit profession stands at a crossroads: evolve and lead, or lag and fade. The choice is ours.

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Sources:

• Global Internal Audit Standards (2024), Institute of Internal Auditors (IIA)
• Vision 2035: A Roadmap for the Future of Internal Auditing
• Eulerich, M., Masli, A., Pickerd, J., & Wood, D. A. (2022). The Impact of Audit Technology on Audit Task Outcomes: Evidence for Technology-Based Audit Techniques

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