I’m always excited when The Internal Audit Foundation (IAF) releases a new North American Pulse of Internal Audit report, having helped launch the series when I was CEO. We created the report because we wanted to understand how the profession was weathering the global financial crisis. In the 16 years since, the Pulse has offered a valuable annual snapshot of internal audit’s current state, enduring trends, and future outlook. The 2025 North American Pulse of Internal Audit, sponsored by AuditBoard, includes key findings focus on strategy, advisory services, technology use, CAE responsibilities, audit planning, budgeting, and staffing. Below are my eight top takeaways.

1. Greater Strategic Alignment Is Associated With More Sufficient Funding

The 2025 Pulse found that higher levels of funding tended to be in place when internal audit functions report greater alignment with the organization’s strategic plan. Fully aligned functions enjoy a 21-percentage-point funding advantage versus those only somewhat aligned.

This finding reinforces the need for internal audit strategic plans that map organizational strategy, as required by the Global Internal Audit Standards. However, the results raise the timeless question: “which comes first — the chicken or the egg?” Does more sufficient funding enable greater alignment with organizational strategy, or does a lack of alignment result in diminished funding? While there is a clear correlation between the two, it’s unclear which follows which. 

2. Insufficient Funding Impacts About Half of Internal Audit Departments

Overall, the 2025 Pulse assessed that budget increases and decreases have stabilized to near pre-COVID levels. However, approximately half of CAEs (47%) indicate that funding is insufficient or only somewhat sufficient. While responses vary across industries, it’s nonetheless notable that concerns about insufficient funding remain widespread. 

How can internal audit teams get more funding? Simply calling funding insufficient is itself insufficient. You need to prove what you can do with additional funding. That may require doubling down on efforts to use your limited resources to demonstrate the value you can deliver. 

3. Data Analytics Is CAEs’ Most Sought-After Skill

CAEs identified the five areas in which they most want to improve their teams’ competencies. Data analysis was the top response, selected by 78% of respondents. 

These results could be seen as an indictment of the current state of data analytics in internal audit. Many teams have had these technologies for decades, but most are still struggling to realize their benefits. CAEs should prioritize upskilling teams in data analytics, and ensure they have access to state-of-the-art data analytics technology.

4. Internal Audit Use of AI Is Still Modest at Best

Only 41% of teams report using generative AI in internal audit, and most usage remains infrequent. Few teams use AI often or extensively: 13% for planning, 6% for fieldwork, 11% for reporting, and 2% for follow-up. AuditBoard’s 2025 Focus on the Future survey found similarly lagging adoption and low maturity.

However, my biggest concern is the preponderance of teams indicating no progress whatsoever: Nearly 60% are still not using generative AI in internal audit. Closing internal audit’s AI gap requires taking bold, meaningful action to use AI.

5. Most CAEs Are Wearing Multiple Hats

Continuing the trend evidenced in prior reports, almost 90% of CAEs have at least one area of responsibility outside internal audit. Common responsibilities include fraud investigation (47%), ethics or whistleblower programs (33%), enterprise risk management (ERM, 32%), or compliance/regulatory (24%). In public companies, 79% of CAEs have SOX responsibilities and 44% have ERM responsibilities. The benefits of wearing more than one hat can include better alignment between the respective functions. However, when the CAE plays more than one role, concerns about internal audit’s independence and the CAE’s own objectivity can surface.

6. Less Than 25% of Internal Audit’s Time Is Spent on Financial Risks

The myth that internal auditors focus primarily on financial-related risks is once again debunked by this year’s survey. Audit planning results reinforce the modern-day reality: Internal audit spends fewer than one in four staff days on financial audits, with the lion’s share of audit plans focused on operational, compliance/regulatory, IT, cybersecurity, ERM, and other risks. 

As illustrated by the top seven audit areas (see graphic), internal auditors focus on a balanced portfolio of risks, disproving the persistent myth that the profession focuses primarily on financial risks. Together, financial reporting (including ICFR) and financial areas (excluding ICFR) account for only 24% of audit plans.

7. Talent Remains a Critical Strategic Risk 

The 2025 Pulse found that the rate of staff growth has nearly returned to pre-COVID levels. However, 68% of CAEs reported recruiting to fill new or vacant positions in the past year, and more than half (55%) were backfilling existing positions. This echoes my 2024 survey on the strategic risks facing internal audit, in which the inability to attract and retain talent ranked second.

Facing ever-increasing risk velocity, volatility, and complexity, internal audit teams need a unique mix of technical, analytical, and interpersonal skills. CAEs need forward-looking talent management strategies that encompass recruiting, retention, and upskilling existing teams. 

8. CAE Ranks Are Undergoing a Generational and Gender Shift

The latest age and gender data showcase a noteworthy passing of the torch. Millennials are taking a prominent role in the ranks of internal audit leadership as more Baby Boomers step aside — and they are increasingly likely to be female. In the past year, the percentage of Boomer CAEs fell (26% to 21%) as Millennials rose (17% to 21%), balancing the groups alongside dominant Generation X (58%). 

The Boomer-Millennial contrast is stark when evaluated in the context of gender, as the lowest and highest age brackets are near-inverse images. Indeed, over my career, female CAEs have gone from being relative rarities to rapidly closing the gap: While only 33% of 2017 Pulse respondents were female, 47% of all CAEs are now female. 

Looking Back to Chart the Course Ahead

The real value of the IAF’s North American Pulse of Internal Audit is that, as the name suggests, it provides an ongoing, metric-based ability to measure what’s happening in the profession. It also offers internal audit leaders an annual opportunity to reflect on what their peers are seeing, doing, and expecting — not because they should mirror it, but because it’s useful to understand what other leaders are going through. It’s a valuable benchmarking tool that enables more effective preparation for the future. 

As Warren Buffett is credited as saying, “In business, the rearview mirror is always clearer than the windshield.” Successful leaders learn to use their rearview mirrors to avoid mistakes and course correct as needed. What are your key takeaways from the 2025 Pulse, and how will they inform your strategy, planning, and execution?