Top Takeaways From the 2025 Focus on the Future Report

The first half of the 2020s has been an era of perpetual risk-induced disruption — an age of permacrisis that is unrelenting. The incredible level of disruption has left teams scrambling to manage risks in the face of shifting regulations, major global events, and the rise of new technologies. Worse, as risk grows, resources to manage them aren’t keeping pace for most organizations — meaning the challenge is to drive better results from existing resources.  

Despite the obstacles, internal audit leaders face a critical imperative to help their organizations tackle the gap head-on, by improving how they strategize, prioritize, use technology, manage talent, and collaborate across the organization. Unfortunately, as AuditBoard’s 2025 Focus on the Future survey of more than 375 internal audit leaders shows, some CAEs are missing key opportunities to narrow the gap. Download your copy of the full report, 2025 Focus on the Future: Inflection Point for Transformation at Mid-Decade, and read on for key takeaways.

Progress on AI Use and Governance Is Lagging

Most CAEs report that their organizations’ AI governance — as well as their understanding of their organizations’ AI usage or risks — significantly lacks maturity. Just under half (49%) of internal audit leaders report having a clear understanding of the major uses of AI in their organizations. This is a startling finding, as it would seem to suggest inadequate risk assessment and monitoring. 

Internal audit’s use of generative AI also appears to be highly immature. Approximately half of all internal audit functions have made no efforts toward implementing generative AI in any part of their work. Additionally, only 4% of functions report substantial progress in implementing generative AI in any area. 

I’ve been a highly vocal champion for generative AI, so I’ve been approached by countless internal auditors who call out the obstacles they face in adoption. Many point to their organizations’ strict regulations on AI usage. Others stress the need to exercise caution. Both are valid reasons to take care. Neither is an excuse to fail to make any progress whatsoever. Remember, your acumen, judgment, and experience are your safety net.

Many Audit Teams Aren’t Ready for the New IIA Standards

Implementing The IIA’s new Standards is no small matter. Yet, 35% of our survey respondents do not expect to meet the January deadline. Larger organizations are more likely to say they expect to meet the deadline, while 42% of small internal audit functions expect to miss the deadline. 

These findings are only a small piece of a much bigger picture. Regardless, the one-third expecting to miss The IIA’s deadline corresponds to a large number of internal audit functions that will not be in conformance with the Standards. This is not a healthy sign for the profession — and frankly, these low compliance levels could easily worsen in the long run, especially as more Topical Requirements come into play. 

Survey Uncovers Barriers to Strategic Planning

As I noted last year, strategic plans were likely to be adopted as a new requirement — and they have been (Standard 9.2). We asked internal audit leaders to identify any major impediments to developing the strategic plan mandated by this standard. Unfortunately, the most common selections suggest that many CAEs may lack a strong understanding of strategic planning.

Encouragingly, 43% of respondents indicate “no impediments.” This chart reflects the impediments reported by the remaining 57%. Half of respondents cited “uncertainties about future resources, objectives, etc.” and 41% say it isn’t critical enough to displace other responsibilities. 

Regrettably, those who cite future uncertainty as an impediment likely do not fully understand the purpose of a strategic plan. Strategic plans aren’t there to provide the answers. They exist to help you ask the right questions, assess your options for responding, and get everyone in your organization on the same page. It’s precisely because risk is so volatile and uncertain that strategic plans are needed. Whatever the impediments, strategic plans are worth the time and effort — and they’re now a must-have for conformance with the Standards.

Ongoing Resource Optimism at Odds With True Picture

A continued pattern in the Focus on the Future reports has been ongoing budget and staffing optimism at odds with continuing macroeconomic uncertainty and a fluctuating labor market. More than half (54%) of internal audit leaders anticipate that their budgets will increase in 2025 and their headcount will stay the same (67%) or increase (26%). 

Unfortunately, history shows that budget expectations rarely align with budget realities. More than 60% of last year’s survey respondents expected budget increases in 2024, yet only  45% reported actual increases. On the talent front, the discrepancy was lower, but a number of respondents still reported staffing decreases they weren’t anticipating. 

Clearly, there is still a huge opportunity for internal auditors to step up as trusted advisors and agents of change, delivering the insight and foresight their organizations need to navigate the road ahead. For a deeper dive on each of these topics, plus insights on highest-ranked risks for 2025, expected audit effort in key areas, and future-focused auditor tips, get your free copy of 2025 Focus on the Future: Inflection Point for Transformation at Mid-Decade today.