10 strategies for effective internal audit management
Internal audit plays a core role in keeping organizations on the right path, with internal audit management key to delivering the "checks and balances" that assure companies' governance, risk management and compliance processes. An internal audit ensures that internal controls are operating as they should, and as a result, helps your organization remain ahead of emerging risks.
The landscape for internal audit has transformed significantly in 2025. According to The Institute of Internal Auditors' Global Risk in Focus 2025 report, organizations now face rapidly evolving challenges, including cybersecurity threats, digital disruption and complex regulatory requirements. This demands more sophisticated internal audit management approaches than traditional compliance-focused methods.
To this end, this article covers effective internal management, including:
- What an internal audit is and how the 2025 Global IIA Standards reshape audit management requirements
- The purpose of an internal audit
- 10 best practices for internal audit management
- How AI-powered technology transforms internal audit effectiveness
What is meant by internal audit?
Internal audit is how companies evaluate their internal controls, including governance and accounting processes. It has increased significantly in recent years as the Sarbanes-Oxley Act has tightened reporting requirements around financial controls.
The profession underwent a fundamental shift in 2025 when the Institute of Internal Auditors implemented new Global Internal Audit Standards, replacing the 2017 International Professional Practices Framework. These updated standards emphasize risk-based strategic advisory roles rather than purely compliance-focused activities.
Internal audits ensure that your processes comply with relevant regulatory and legislative requirements, and support accurate data gathering and reporting, whether on financial, environmental, social and governance (ESG) or other data. Current federal AI governance mandates have also expanded internal audit responsibilities to include artificial intelligence risk assessment and control frameworks.
By providing independent assurance and advisory services, internal audits serve as management's first opportunity to identify problems before external audits, enhance operational efficiency and improve risk management practices.
What is the purpose of an internal audit?
By providing the first line of defense against poor processes and controls, an internal audit is your primary tactic in the war against non-compliance. However, the benefits of effective internal audit management extend beyond mere compliance.
Research from The IIA's 2025 North American Pulse survey, involving over 3,500 internal audit leaders globally, reveals that audit committees now prioritize three critical areas: cybersecurity oversight, enterprise risk management integration and addressing significant talent challenges across finance and internal audit functions.
Effective internal audit management can also monitor and enhance corporate culture, a factor recognized as vital to a compliant organization. As the Financial Reporting Council, a UK regulator, recently noted, the internal audit process "has a vital role to play in providing assurance and reports to the board that the culture is healthy." Governance and culture are intrinsically linked, with the FRC believing that good governance is "aligned to a positive corporate culture."
By aligning internal audits with your broader business strategy, you turn a compliance exercise into an opportunity to use the audit process for business improvement. Internal audit strengthens integrated risk management, bolsters ESG performance, provides safeguards against fraud and cyberattacks and elevates the audit team from compliance practitioners to strategic advisors.
While external audits examine prescribed controls and risks, your internal audit function is more comprehensive. In an ideal environment, your internal auditor combines auditing rigor with consulting insight — checking processes while suggesting improvements that help your organization evolve and grow.
Exploring best practice internal audit management processes
Being able to achieve this demands that you put in place some best practice approaches to internal audit management. Based on current industry research and the updated IIA 2025 Standards, we've identified ten essential internal audit management strategies.
1. Comprehensive audit planning drives success
Preparing for an internal audit is vital — it will help get buy-in for the process, ensure deadlines are met, and facilitate the availability of all the data you need to conduct the audit.
Your audit plan should reflect your organization's strategic priorities, not just compliance requirements. Start by understanding which business objectives keep your C-suite awake at night: market expansion, digital transformation, M&A integration or regulatory changes.
Afterward, explain the audit process to the team you're auditing. Don't forget to convey the benefits of the audit; it's a process designed to benefit them, not just to fulfill a governance need. Talk about increased efficiency, better processes and the opportunity to do a trial run for an external audit.
Establish a core team, communicate the scope of the audit, and share details of the data you will need and the systems you will want to access. Send materials to participants at least seven days before meetings to ensure adequate preparation time. Carrying out a preliminary risk assessment may help you with this last point.
2. Engage with the business you're auditing
Turning up once a year, with little forewarning, auditing a department and then disappearing for another 12 months does not help build the necessary bridges between internal audit and the rest of the business.
Communicate frequently, explain your objectives to resonate with the team being audited, and feed back on findings, next steps and outcomes to ensure everyone involved feels part of the internal audit process. Position your internal audit team as business consultants who help departments continuously improve their risk management processes.
Schedule regular meetings with business unit leaders outside of formal audit cycles. These conversations help you:
- Understand operational challenges
- Identify emerging risks early
- Build the trust that makes audit fieldwork more effective
For board and audit committee relationships, provide regular updates on audit activities, risk trends and control effectiveness. Don't wait for formal reporting cycles to share significant findings. Proactive communication builds credibility and positions the internal audit team as a trusted advisor.
3. Implement continuous risk monitoring and assessment
Traditional annual audit cycles create gaps where risks evolve faster than your audit plan addresses them. Continuous risk monitoring closes these gaps by providing ongoing visibility into control effectiveness and emerging threats.
Establish mechanisms for real-time risk intelligence gathering across your organization. This includes automated control monitoring, exception reporting and regular touchpoints with business units to identify new risks before they materialize into issues.
Technology enables this shift from periodic to continuous oversight. AI-powered platforms can analyze 100% of transactions rather than samples, flagging anomalies and control failures as they occur rather than months later during scheduled audits.
Continuous monitoring doesn't replace audit cycles but enhances them. Use continuous controls monitoring to identify where to focus detailed audit work. This allows your team to shift from routine testing to investigating exceptions and providing strategic guidance.
4. Identify and test key controls using risk-based prioritization
Your risk assessment will enable you to pinpoint significant risks and the controls that manage them. The 2025 IIA Standards emphasize risk-based auditing that aligns with organizational strategy and emerging threats.
Whether this involves testing your organization's zero-trust architecture or other IT risk management strategies, measuring your sustainability practices, examining financial controls, or addressing other specific organizational needs, identifying key risks and their corresponding controls is the next essential step.
This fieldwork phase requires gathering information on controls, measurement processes, and remedial actions. Capture your findings in writing to build a compliant audit trail. Keep communicating with your audit "clients" so everyone understands your objectives and actions.
For enterprise organizations with complex control environments, prioritize controls that address multiple risks or support critical business processes. This risk-based approach ensures audit resources focus on controls with the greatest impact on business objectives.
5. Be proactive in audit reporting and documentation
The audit report is your opportunity to demonstrate value to stakeholders. Best practice internal audit management makes report collation an integral part of fieldwork, not an afterthought. Don't wait until you've finished data-gathering to start writing; you'll forget crucial details and nuances that inform rounded audit reports.
Share findings as you develop them. This gives audited teams and stakeholders insight into what's coming and prevents unpleasant surprises in final reports. It also creates opportunities for management to begin remediation before formal report issuance.
Board expectations for internal audit reporting have evolved significantly. The Center for Audit Quality’s 2025 Audit Committee Practices Report reveals that only 31% of audit committee respondents expressed satisfaction with their meeting performance, down from 35% the previous year, indicating growing dissatisfaction with traditional reporting approaches.
Transform your reporting from compliance checklists to strategic intelligence. Board members and executives don't need exhaustive control testing details — they need insights about what the audit findings mean for business objectives. Connect control deficiencies to business impact:
- How does this weakness affect transaction readiness?
- What does this pattern suggest about operational efficiency?
- Where do control failures create strategic vulnerabilities?
Use data visualization and dashboards to make audit insights accessible. Heat maps showing control effectiveness across business units, trend analyses revealing deteriorating controls, and benchmarking data comparing your organization to peers transform static audit reports into actionable intelligence.
6. Take a more agile and advisory approach
Internal audit management traditionally followed rigid processes with set deadlines and parameters. Introducing agility — borrowing from software development methodologies — gets stakeholders on board in ways that annual audits cannot.
Position your internal audit team as business partners who act in a consulting capacity to help business units continuously improve risk management processes. This approach gains respect and support from audited teams while demonstrating that everyone works toward the same goals.
Agile auditing breaks large audit projects into sprints with defined deliverables. Instead of six-month audits culminating in massive reports, conduct two-week sprints that deliver specific insights management can act upon immediately. This approach provides faster value delivery and creates opportunities to adjust audit scope as you learn more about the business environment.
Hold daily stand-ups during audit fieldwork to identify blockers and maintain momentum. Conduct sprint retrospectives to continuously improve your audit approach based on what worked and what didn't.
7. Prioritize cybersecurity and emerging technology risk audits
As cyber threats evolve and technology adoption accelerates, internal audit must expand traditional financial controls focus to address cybersecurity, AI governance and technology risk management. These areas represent some of the most significant risks facing mid-market and enterprise organizations today.
Develop specialized capabilities for auditing IT general controls, cybersecurity frameworks and emerging technology implementations. This doesn't mean every auditor needs deep technical expertise — but your function needs access to these skills through hiring, training, or co-sourcing arrangements.
Collaborate with IT security teams to provide an independent assessment of control effectiveness. Your role isn't to manage cybersecurity but to provide assurance that management's approach adequately addresses the risks. Evaluate whether cybersecurity programs align with industry frameworks, test control effectiveness and assess whether the organization can detect and respond to incidents.
For AI and emerging technologies, focus on governance frameworks, ethical considerations and risk management processes. How does management assess AI risks? What controls prevent bias or unintended consequences? How does the organization ensure AI implementations comply with evolving regulations?
Modernize your audit approach
Transform your internal audit from compliance-focused to strategically valuable with AI-powered insights and automated risk management.
Book a demo8. Build advanced data analytics capabilities for 100% audit coverage
Moving beyond sample-based testing to comprehensive data analysis represents one of the most significant opportunities for internal audit transformation. Advanced analytics enable you to examine 100% of transactions, identify anomalies that samples might miss, and provide continuous assurance rather than point-in-time testing.
"Trust is the number one thing. Once you have trust that the executive teams believe in the data, believe in the risk you are identifying, then you can have fulsome conversations, you can create change," says Tom Keaton, former Director of Internal Audit at Crown Castle.
Implement data analytics across your audit process:
- Use analytics during planning to identify high-risk areas
- Employ continuous monitoring during execution to flag exceptions
- Leverage visualization tools during reporting to make findings accessible to non-technical stakeholders
Build data analytics competency within your team through training and recruitment. Partner with IT and data science functions to access enterprise data sources and develop analytics scripts that automate routine testing. This frees your skilled auditors to focus on investigation and advisory work rather than manual data gathering.
9. Establish comprehensive quality assurance and performance management
The 2025 Global IIA Standards introduce enhanced requirements for internal audit quality assurance and performance assessment. Organizations must now establish quality assurance programs that include both internal assessments and external quality assessments at least every five years.
Implement ongoing monitoring of audit activities to ensure consistency, accuracy, and adherence to professional standards. This includes peer reviews of audit work papers, supervisory reviews of significant judgments and periodic assessments of audit methodology effectiveness.
Develop balanced scorecards that measure internal audit performance across multiple dimensions: stakeholder satisfaction, audit plan completion, cycle time efficiency, value of recommendations implemented and coverage of high-risk areas. These metrics demonstrate audit function effectiveness to boards and executive leadership while identifying improvement opportunities.
10. Leverage AI-powered audit management technology
Internal audit management can be streamlined and upgraded dramatically through audit management software. If you want to make audit an intrinsic part of corporate strategy, implementing a technology-based approach delivers substantial benefits.
Automated workflows speed the internal audit process while minimizing potential for human error or omission. Modern platforms generate board-ready outputs that move beyond data to insights informing C-suite decision-making.
Today's intuitive audit management software addresses limitations of first-generation automation. Earlier tools sometimes created "dark data" that couldn't be analyzed or shared effectively. Current platforms enable internal audit teams to access and interrogate 100% of their data, providing comprehensive coverage rather than sample-based testing.
Technology also enables continuous monitoring, transforming internal audit from periodic snapshots to ongoing intelligence.
How AI technology transforms internal audit management effectiveness
These ten strategies accelerate your internal audit management process from compliance to strategic advantage. Technology implementation delivers the most substantial and fastest results by enabling capabilities that manual processes simply cannot achieve.
With that in mind, Diligent Audit Management provides comprehensive solutions for planning, executing, and reporting internal audits that directly support modern audit management approaches.
The platform offers AI-powered analytics, continuous controls monitoring and automatic risk identification, empowering organizations to monitor enterprise risks in real time with full coverage across business units and subsidiaries.
Additionally, Diligent ACL Analytics delivers advanced analytics that automate testing and analyze 100% of transactional data rather than traditional sampling methods. ACL Analytics enables teams to shift from periodic to continuous oversight through real-time anomaly detection that scales with organizational complexity.
For organizations requiring high-security standards like government entities, Diligent's FedRAMP-authorized audit solutions provide the assurance needed for sensitive data and regulatory compliance.
Modernizing your approach to internal audit smooths processes and enhances outputs, propelling your internal audit team to a trusted advisor status by enabling the delivery of actionable insights rather than backward-looking compliance reports.
Ready to transform audit efficiency? Book a demo to discover how Diligent’s AI-powered internal audit management can streamline your internal audit management while strengthening your risk management framework.
FAQs about internal audit management
What are the key changes in the 2025 IIA Internal Audit Standards?
The 2025 Global Internal Audit Standards, effective January 9, 2025, emphasize risk-based strategic advisory roles rather than purely compliance-focused activities. Key changes include enhanced quality management system requirements, stronger integration with enterprise risk management and expanded guidance on technology utilization, including AI governance frameworks.
How can internal audit teams use AI and technology to enhance audit effectiveness?
AI and technology enable internal audit teams to shift from sample-based testing to comprehensive data analysis, examining 100% of transactions rather than limited samples. AI-powered tools identify patterns and anomalies that manual reviews might miss, while automated workflows reduce cycle times and improve consistency.
Technology also enhances audit reporting through data visualization and dashboards, making findings accessible to non-technical stakeholders.
What role should internal audit play in AI governance?
The Institute of Internal Auditors positions internal audit as "key players" in organizational AI governance, providing independent assurance that AI risk and control frameworks are robust, regularly updated and effectively implemented across business units. This includes evaluating AI decision-making processes, data quality controls and algorithmic bias assessments.
How often should organizations conduct internal audits?
Best practice varies by organization size and risk profile, but contemporary approaches emphasize continuous monitoring and risk-based scheduling rather than fixed annual cycles. High-risk areas may require quarterly assessment, while stable low-risk processes might be evaluated every 18-24 months. The key is aligning audit frequency with organizational risk appetite and regulatory requirements.
What metrics should organizations use to measure internal audit effectiveness?
Focus on strategic impact metrics rather than purely operational measures. Key indicators include percentage of audit recommendations implemented within target timeframes, audit cycle time reduction, stakeholder satisfaction scores and the number of significant risks identified before they impact operations.
Discover how Diligent can help you manage the entire internal audit process while delivering strategic insights that drive business value.
