You’re mid-cycle on an audit. The data’s scattered, the risks are evolving and the board wants answers — yesterday. Sound familiar?

Across industries, internal audit teams are feeling the pressure. But the smartest ones? They’re already using AI to detect fraud, automate control testing and deliver insights faster than ever. If your team is just starting to explore it, you’re not behind — you’re right on time. Because when AI starts making decisions inside your organization, someone needs to audit those decisions.

The pressure is real — but so is the opportunity

You’ve felt it. The risk landscape is accelerating — cyber threats, third-party exposure, regulatory scrutiny. Meanwhile, expectations are rising: faster insights, broader coverage, continuous assurance. But this isn’t just a challenge — it’s a chance to rethink 

 AI tools for internal audit are helping teams move from reactive to proactive, from manual to intelligent, and from siloed to strategic.

Manual audit methods weren’t built for today’s pace

Traditional approaches are slowing teams down. Sampling misses too much. Data gathering takes too long. And insights often arrive after decisions have already been made.

 — giving auditors the ability to analyze more data, spot patterns faster and deliver insights when they matter most. You weren’t built to be a data wrangler. You were built to be a strategic advisor. AI can help you get back to that.

AI isn’t replacing auditors — it’s amplifying them

Here’s what happens when internal audit teams embrace AI:

But that’s just the beginning. AI is transforming internal audit across the full lifecycle:

Risk detection & anomaly identification: 

AI can surface patterns auditors might miss — helping teams spot fraud, errors, or emerging risks earlier.

Real-time audit trails and automated controls testing mean assurance doesn’t stop when the audit ends.

 Predictive analytics help prioritize high-risk areas, so teams focus where it matters most.

Natural language generation enables faster, clearer audit reports — making it easier to communicate findings and drive action.

Whether it’s anomaly detection, automated control testing or natural language reporting, 

AI is helping audit teams elevate their impact.

Ready to evolve your audit skills for AI? 

You don’t need to be an AI expert overnight. But understanding how models work, collaborating with IT and data teams, and updating your methodology to include AI systems? That’s where the shift begins.

Many teams are already taking the first steps — testing tools, exploring use cases and building confidence. Whether you're just starting or scaling what’s already working, the opportunity is clear: AI can help you deliver smarter, faster assurance. As it becomes part of everyday workflows, the focus is shifting toward capability: building fluency in AI concepts, adapting methodologies, and aligning audit strategy with emerging technologies.

Here’s what forward-thinking teams are doing:

 that enhance audit coverage and precision

 to reflect AI-driven risks and processes

These shifts are helping teams move faster, go deeper, and deliver assurance that reflects today’s pace of change.

Wondering where your team stands? Start with these questions:

Is your team using AI to enhance audit quality and coverage?

Do you understand how AI models generate insights and where their limitations lie?

Is your methodology evolving to reflect AI-driven processes and risks?

Can you confidently explain AI-enabled findings to stakeholders?

These questions reflect the evolving role of internal audit in an AI-enabled organization. As AI becomes embedded across business processes, audit teams are uniquely positioned to assess its impact, strengthen assurance, and guide smarter decision-making. Building fluency in AI isn’t a side task — it’s central to delivering value in today’s risk landscape.

Join us in Atlanta, April 22–24, for Elevate 2026. Discover how top teams are scaling assurance, accelerating insights, and driving strategic impact. 

Audit smarter. Lead stronger.

Across industries, internal audit teams are already using AI to:

✅ Automate control testing across financial systems
✅ Detect fraud in procurement data
✅ Expand audit coverage with continuous analytics

practical solutions delivering measurable value.

 AI systems are already influencing decisions across your organization. Internal audit has a critical role to play — not just in evaluating those systems, but in using AI to strengthen assurance and drive strategic impact.

AI is already helping audit teams move faster, go deeper, and deliver more value. Whether you're just starting or scaling what works, Diligent Elevate is your chance to learn how.

Join us in Atlanta, April 22–24, for Diligent Elevate — the premier event for GRC professionals exploring AI-powered transformation. Expect real use cases, expert-led sessions, and practical takeaways you can apply right away.

 and discover how AI can help your audit team lead with confidence.

AI in internal audit: What smart teams are doing differently 

Budget oversight for public boards is never just about dollars and cents. For school board and local government leaders, every decision has a ripple effect on classrooms, neighborhoods and public services. At the same time, leaders are balancing tight budgets, shifting priorities and the need to demonstrate transparency to their constituents.

Strong financial and risk oversight isn’t only about stability; it’s about earning and keeping the public’s trust.

Smart oversight: Proactive budget risk defense for school districts & local government

, a recent Diligent webinar. The session was moderated by Kristin Karel, director of sales for the public sector at Diligent, who partners closely with elected boards and understands the challenges they face on the ground. The conversation considered how proactive oversight can help public leaders not only manage risk but also build confidence with their communities and keep essential services moving forward, even when circumstances change quickly.

, and read on for some of the highlights.

Boards and councils must have a constant view of risks that lay ahead, which means building risk assessment and planning into the entity’s ongoing work. Risks can range from natural disasters to 

, but they all require a nimble response.

Terry Spradlin, executive director of the Indiana School Boards Association, noted several types of risks local school boards face. “In Indiana, we're prone to tornadoes and floods, so there's that element of risk to facilities,” he said. “We have cybersecurity risk and have to protect the business operations of our school districts. Then there's the unfortunate circumstance of fraud or mismanagement. If the board's doing its work and providing financial oversight, we can be proactive and prevent fiscal mismanagement or fraud because we're being diligent about doing the work and providing appropriate financial oversight.”

Stephen Powell, assistant city administrator for the City of Leawood, Kansas, addressed different concerns: “If we can't make our bond payments, that's huge. So we’re looking at some of those funds that we use that are not our general fund, making sure our funds are healthy and that if something happens, whether it be through the state legislature changing a law or a downturn in the economy, we have a game plan to fill in the hole it might create in our budget so that our financial risks can be mitigated as much as possible.”

A policy of transparency continues to reap rewards for schools and municipalities that want to build trust and diminish risk in their communities. After all, stakeholder transparency is one of the 

As Spradlin notes, transparency exists from the top down, and many key contributors have a role to play: “The administration will be having conversations with personnel, including the teachers’ union about salary benefits and the collective bargaining process. The CFO will be advising the superintendent and the board on financial conditions. The transportation director will be informing the board and the administration about transportation costs. The administrative team working well together to provide the right information to the school board is such a critical part of transparency and accountability.”

The right tools also matter. Powell describes how a new solution helped with budget transparency: “In the last year or two, we've made some pretty significant investments in new budgeting and finance software, and that has allowed us to not only access our data more seamlessly than we were able to before, but it is also going to allow us to put our checkbook online so that anybody can see where the money's going. Putting more of our information online in a format that allows residents to drill down is a lot more transparent than just putting a 600-page PDF of the budget document.”

Having an eye on the horizon for changes, whether big or small, keeps your team ready to adjust. Powell shares a couple of different ways his municipal team watches for change: “We look for sales tax collection trends as we go through the year and use that data to adjust our projections, either up or down. For instance, right now we're looking like we're about a half-percent lower than what we projected, so we're starting to adjust those projections down a little bit to make sure that we can live within a realistic budget assumption.”

He adds, “There are more risks that we're looking into, particularly with the possibility that the state may limit our property tax collections. We're really trying to educate the governing body. ‘If this were to happen, here's what to expect.’ And a lot of those expectations, they may not have ever had to deal with before in the budget process. It’s taking this time to educate our council on things getting ready to change for us as they're going to change for probably everybody in Kansas.”

Every board or council should be an active assessor of the information they review for meetings and beyond and know the right questions to ask. This can require coaching, as Spradlin explains.

“Before the meeting, they should be receiving a board packet, maybe that's online through a paperless management system like 

,” he says. “They need to review the materials and then ask themselves, ‘What information don't we have that we need?’ We guide them on key questions to ask about the use of resources and the strategic plan:

“‘Does the district have a well-defined articulated vision and mission that drives the financial decision-making?’

“‘Are fund balances easily identified and monitored?’

“‘How much does the district spend each month?’

“‘Are expenditures within the budget or over budget?’ ‘

“Ultimately we say, ‘Because we have such limited resources and we're having to tighten our belt because of fiscal policy and economic conditions, are these resources tied to our why?’ Which is elevating students' achievement outcomes.”

Create opportunities for ongoing training and education

Board and council roles are complex. Good financial oversight and risk management can demand a lot of the elected and appointed officials and the staff who support them. Strengthen the team’s performance with ongoing training and opportunities to learn.

Spradlin says, “We provide a lot of different training through our conferences and seminars. Just last week we launched a new micro-credentialing program on school finance and budgeting oversight. That's how important this issue is. There are a lot of calendars and mandates we have to comply with, and we really need to be focused on the right things that are aligned to the vision and mission of the school district and the strategic plan.”

Training and education can take alternative forms. Powell describes his team’s work: “We also offer them office hours. If they have a budget question that they may not feel comfortable asking in a meeting, or maybe they just want to have a better understanding about something going on with the budget, they can come in with our finance director and me, and we'll spend as much time as they need getting them comfortable. Because our budget — and I'm sure Terry's is the same way — is really complex.”

 for more tips and insight on financial and risk oversight from these experts. Diligent offers other resources such as a 

 packed with even more tips from more school board and local government leaders.

What public boards need to know about financial oversight and risk

GC Risk Index: GCs report heightened risks

A new survey of general counsel, chief compliance officers and audit leaders finds business risk on the rise in the third quarter, amid turbulent regulatory environment and tariff impact. 

Since the start of the year, geopolitical pressures have combined with trade negotiations and deregulation efforts to create heightened volatility for business. And as we begin the fourth quarter of the year, that instability shows little sign of improvement. 

Business risk is surging, according to legal and compliance leaders surveyed by Corporate Board Member as part of our Q3 Business Risk Index, which is a survey of general counsel, compliance leaders and audit members conducted in partnership with Diligent Institute. 

Legal and compliance chiefs are rating thel evel of risk in the current business environment at 7.9 out of 10, on a scale where 1 is Negligible and 10 is Significant. That number has been rising significantly since Q1, when business risk was rated just 5.8 out of 10––an increase of 36 percent since then.

Those polled say they find heightened risk amid the continued disruption of the Trump administration’s tariffs decisions, ongoing geopolitical conflicts and sticky inflation.

“The convergence of these factors keeps risk levels high and requires businesses to invest more in proactive compliance, risk management, scenario planning and governance frameworks,” says Taras Lytovchenko, the chief legal and compliance officer at Trinitex.

Many others who participated in the September survey echoed Lytovchenko’s sentiment, citing “tariff games by the administration” and “macroeconomic forces” as pertinent to this high-risk environment.

Interestingly, while the majority also cited the unpredictability of the regulatory environment as one of the top risks for business right now, that proportion is down 10 percentage points since last quarter. Kristy Grant-Hart, vice president and head of advisory services for Spark Compliance, a Diligent Brand, says companies may feel more prepared to navigate regulatory uncertainty thanks to proactive compliance measures and increased investment in monitoring and risk management.

“As organizations grow more confident in their regulatory frameworks, attention is turning toward more specific business risks like shifting tariffs and global volatility. This could reflect a positive trend in compliance maturity, where legal and compliance teams have built robust processes that allow them to respond to regulatory changes with more agility,” she says.

According to the survey, legal and compliance teams are indeed working to strengthen their companies’ ability to insulate themselves from these impacts and withstand a continuation of the uncertainty in the year ahead. Of the measures they are taking to do so, most list the increasing use of technology, including artificial intelligence, for monitoring and regulatory tracking purposes.

Overall, however, every aspect of compliance is being reinforced, including compliance/ethics training for employees and policy/procedural reviews. The only aspect not expected to increase in priority in the near term is “whistleblower or reporting channels,” which was flat year over year.

“Organizations leading the way in compliance are leveraging technology and procedural reviews not just to meet regulatory obligations but also to strengthen their overall risk posture,” says Grant-Hart. “When companies prioritize advanced compliance tools and ongoing risk assessments, they’re better equipped to anticipate regulatory changes and minimize exposure to emerging risks."

Respondents are divided in their management of geopolitical uncertainty—a divide that’s likely driven by their level of exposure to the turbulence of international trade and tariff stressors.

On one side, the data shows some companies have also been more proactive than others in creating a response plan early on: nearly one-third (27 percent) say they have either expanded their monitoring of cross-border trade or have consulted external advisors on global regulations.

On the other side, data shows43 percent are not changing their compliance priorities at all in response to increased geopolitical instability. This is unexpected—and alarming—as respondents ranked “geopolitical conflicts” as the third-most-pressing risk for business right now. True compliance resilience means actively reassessing policies and controls considering new global developments rather than waiting for risk to materialize. Proactive compliance planning enables organizations to adapt swiftly in an environment where regulatory expectations are constantly evolving.

When it comes to managing AI-related risks, the survey finds most legal and compliance teams have begun crafting some form of governing policies or usage guidelines: 29 percent say their company has a comprehensive plan for governing the use of AI, and another 38 percent say the guidelines are being drafted as we speak.

This ongoing process in a space that is rapidly evolving is perhaps why, though companies are increasing their efforts surrounding AI use, most say they are not “very confident” in their effectiveness: 44 percent report their policies need some refinement, while 33 percent say they are entirely insufficient.

This highlights the strain of AI adoption. While many companies feel an internal pressure to adopt these technologies for various uses, they are also adding complexity to the mix. Effective compliance in the AI era is about more than following the rules, Grant-Hart says, it’s about building transparency and trust in how these technologies are managed.

Legal chiefs’ lack of confidence in their ability to manage AI risk may also explain why directors remain hesitant about adopting such technologies for themselves. In Corporate Board Member’s 

, just 10 percent of directors surveyed said they use AI regularly for oversight purposes, and 32 percent don’t use it at all.

“This disconnect between thorough AI planning by compliance professionals and limited AI adoption at the board level points to the broader challenge of ensuring boards fully grasp both the risks and benefits of AI from a compliance perspective,” says Grant-Hart. “Bridging this gap takes ongoing board education and open dialogue, so directors are empowered to govern emerging technologies in alignment with sound compliance principles.”

Corporate Board Member, a division of Chief Executive Group, has been the market leader in board education for 20 years. The quarterly publication provides public company board members, CEOs, general counsel and corporate secretaries decision-making tools to address the wide range of corporate governance, risk oversight and shareholder engagement issues facing their boards. Corporate Board Member further extends its thought leadership through online resources, webinars, timely research, conferences and peer-driven roundtables. The company maintains the most comprehensive database of directors and officers of publicly traded companies listed with NYSE, NYSE Amex and Nasdaq.

Diligent Institute informs, educates, and connects leaders to champion modern governance. We provide original, cutting-edge research on the most pressing issues in corporate governance; certifications and educational programs that equip leaders with the knowledge and credentials needed to guide their organizations through existential challenges; networks that convene directors and corporate executives to share best practices and insights; and awards and recognition programs that celebrate the accomplishments of those who champion modern governance. Learn more at 

GC Risk Index: GCs report heightened risks 

This article originally appeared in our September 11, 2025 edition of the Diligent Minute Newsletter. For more insights like these, delivered straight to your inbox, subscribe

Governance Technology Evolution: Milestones & Shifts

When I first started in the governance technology space twenty years ago, the world was a very different place. Most companies were still governed by the rhythms of paper, pen and marathon meetings. At the time, Sarbanes-Oxley loomed large, reshaping how public companies understood and enforced accountability. Technology in governance was viewed mostly as a way to make board processes more efficient but not fundamentally different.

Back then, the pitch to boards was simple: let technology help you do what you’re already doing, but with less friction and better consistency. The truth was, many directors didn’t believe board service was all that complicated. The role was narrowly defined: hire the CEO, ensure the company’s general wellbeing, and report to shareholders. Risk oversight was barely on the radar, and the idea of technology revolutionizing governance felt, at times, like a solution in search of a problem.

Then came the iPad - both a popular executive holiday gift, and an unexpected inflection point in the governance technology space. Suddenly, directors realized the device could replace the unwieldy board books that weighed down their bags and their schedules. Within months, every governance technology provider rushed to market with an iPad app. Usage soared, but the core proposition for governance software hadn’t yet changed: it was still focused on making board meetings more efficient.

New challenges shift the governance paradigm

Around 2015, another shift occurred when board members found themselves besieged by new and complex challenges: cybersecurity breaches, ESG demands, shareholder activism, and the ever-expanding universe of stakeholder expectations. The job of the board was becoming more about risk oversight. Directors no longer had a passive role, but an active responsibility for scanning the horizon and anticipating what might come next. I started hearing directors say, “I want to see what’s coming around the corner.” That mindset shift was profound, and the focus moved from looking backward to looking forward.

This shift drove the next wave of innovation in 

 We knew that boards needed more than digital board books summarizing old data; they needed better dashboards, tools for smarter decision-making, and real-time insights. At Diligent, it was the spark that sent us down the road to becoming a true GRC (governance, risk, and compliance) platform. We started building a line of sight that stretched from the frontlines of the business straight to the boardroom. The goal was to enable directors to do their jobs, not just track what management had already done.

Then the pandemic hit. In an instant, board meetings couldn’t happen unless they went digital and virtual. Concerns about security lurked, especially with everyone working outside traditional firewalls, but Diligent’s commitment to cloud-based encryption and secure access paid off. Necessity propelled long-overdue adoption, and the world of governance technology leapt forward more in a few months than it had in years.

The arrival of generative AI: Boards as architects of the future

Generative AI & the Future of Board Governance

 brought even more layers of complexity: increased market volatility, heightened geopolitical risks, workforce transformation, and the need to revisit what effective oversight really meant. And then, almost on cue, generative AI burst onto the scene. Directors are now seeing tools that could help them “see around the corner” by generating more nuanced scenarios, calculating risk probabilities and offering creative approaches to opportunity assessment. 

We’re at the beginning of understanding what GenAI will mean for governance. In some ways, it feels eerily familiar - a land grab for new tools and capabilities with uncertainty about risk, bias, privacy, and the limits of automation. My hope is that GenAI does not become a more efficient way to do the same things, but a tool that will transform governance itself. Imagine board members focused more on future scenarios than past performance, empowered to ask better questions, spot emerging threats and trends, and help their companies prepare for the unknown.

Of course, as with any new technology there are some 

 GenAI should be a thought partner, not a decision-maker, and we must guard against the temptation to abdicate judgment and let GenAI do the thinking for us. Bias, data privacy, and intellectual property challenges are real risks we must address, not just acknowledge. Mistakes were made with earlier tech rollouts (social media and recommendation engines among them), and we have the opportunity with GenAI to get it right before the window closes.

Looking back, I’m struck by how much the field has changed - and how much further it still has to go. The first twenty years of governance technology were about digitizing and streamlining current processes. The next twenty years could be about reinventing the job itself: helping boards shift from stewards of the past to architects of the future. Whatever comes next, I remain optimistic - and more than a little curious.

As boards face this new era shaped by AI, risk, and rising stakeholder expectations, preparedness is everything.

 from the Diligent Institute and Corporate Board Member to see how directors can navigate uncertainty, embrace innovation responsibly, and build the boardroom of the future.

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AI in internal audit: What smart teams are doing differently

What public boards need to know about financial oversight and risk

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