Boards across the Kingdom are investing more time and resources into governance, assurance, and risk oversight than ever before. Yet a recurring boardroom question remains: Is internal audit truly making a measurable difference?

In Saudi Arabia, this question is not a reflection of declining trust, but rather of rising expectations. As organizations align with national transformation agendas, adopt advanced technologies, and operate under heightened regulatory scrutiny, boards want internal audit to be more than a compliance function. They expect insight, foresight, and strategic value.

This article explores why boards in KSA increasingly question the impact of internal audit, the structural and perception gaps driving this skepticism, and what boards now expect from a modern internal audit function.

The Evolving Governance Landscape in Saudi Arabia

Saudi boards operate in a uniquely dynamic environment. Regulatory reforms, privatization initiatives, public listings, and digital transformation are reshaping how organizations manage risk and performance.

Key drivers include:

• Alignment with Saudi Vision 2030, which demands transparency, accountability, and sustainable value creation

• Stronger enforcement and expectations from regulators such as the Capital Market Authority

• Governance and professional standards issued by SOCPA

In this context, boards are no longer satisfied with internal audit reports that simply confirm control existence. They want assurance that risks are anticipated, governance is future-ready, and management decisions are being challenged constructively.

Internal Audit’s Traditional Role vs. Board Expectations

Historically, internal audit in many KSA organizations focused on:

• Compliance testing

• Financial and operational controls

• Policy adherence

• Retrospective assurance

While these remain essential, boards today expect internal audit to:

• Provide insight into emerging and strategic risks

• Evaluate the effectiveness of governance and risk culture

• Support board-level decision-making with independent analysis

• Act as a trusted advisor, not just a checker

The disconnect between legacy expectations and modern board needs is one of the core reasons boards question internal audit’s impact.

Common Reasons Boards Question Internal Audit’s Value

1. Focus on Low-Risk or Low-Value Areas

Boards often observe that internal audit plans are heavily weighted toward routine processes while overlooking:

• Strategic initiatives

• Major transformation programs

• Cybersecurity and data governance

• Third-party and supply chain risks

When audit coverage does not reflect the organization’s top risks, boards naturally question relevance.

2. Overly Technical, Management-Centric Reporting

Another frequent concern is how audit results are communicated. Reports may be:

• Too detailed and operational

• Focused on minor control gaps

• Lacking clear linkage to business impact

Board members want concise, risk-focused insights that answer:

• What could go wrong?

• How serious is it?

• What should the board care about now?

Without this clarity, even technically sound audits can appear ineffective.

3. Limited Involvement in Strategic Discussions

In many organizations, internal audit is still engaged late in the process—after strategies, investments, or system implementations are approved.

Boards increasingly ask:

• Why wasn't an internal audit involved earlier?

• Could risks have been mitigated proactively rather than reactively?

When internal audit operates in isolation from strategy, its perceived impact diminishes.

4. Independence Without Influence

Independence is a cornerstone of internal audit, but independence alone does not guarantee influence.

Boards may observe that:

• Repeated issues remain unresolved

• Management action plans lack urgency

• Root causes are not effectively addressed

This leads boards to question whether internal audit has sufficient authority, communication skills, or organizational standing to drive change.

5. Skills Gap in a Rapidly Changing Risk Environment

Saudi organizations are adopting:

• Advanced ERP platforms

• AI-driven analytics

• Cloud computing

• Complex joint ventures and PPP models

Boards are increasingly aware that traditional audit skill sets may not fully address these risks. When auditors struggle to challenge technology, data, or complex commercial arrangements, boards question their ability to add value.

Cultural and Structural Factors Unique to KSA

Respect for Hierarchy and Management Authority

In some organizations, cultural norms can limit how strongly internal audit challenges senior management. Boards may sense that:

• Findings are softened

• Sensitive issues are underreported

• Tone is overly cautious

This cultural dynamic can unintentionally reduce the perceived impact of audit work.

Rapid Organizational Growth

Many Saudi entities have expanded quickly through:

• Mergers and acquisitions

• New subsidiaries

• International operations

Internal audit functions sometimes struggle to scale at the same pace, leading to gaps in coverage and assurance that concern boards.

Board Maturity and Increasing Sophistication

Boards themselves are evolving. With more independent directors, international experience, and regulatory accountability, board members:

• Ask sharper questions

• Expect data-driven insights

• Benchmark internal audit against global best practices

This increased sophistication naturally raises scrutiny of internal audit effectiveness.

What Boards in KSA Now Expect from Internal Audit

Alignment with Strategic and Enterprise Risks

Boards expect internal audit plans to be clearly linked to:

• Enterprise risk assessments

• Strategic objectives

• National and sector-level risks

Audits that do not align with these priorities are quickly viewed as low impact.

Forward-Looking Assurance

Rather than focusing solely on past transactions, boards want assurance over:

• Readiness for future risks

• Sustainability of controls

• Resilience of governance structures

This includes scenario analysis and early warning indicators.

Clear, Board-Level Communication

High-impact internal audit functions tailor reporting for the board by:

• Summarizing key risks and themes

• Highlighting trends across audits

• Clearly stating potential consequences

Boards value insight over volume.

Strong Coordination with Risk and Compliance Functions

Boards increasingly look at the combined assurance picture. Internal audit is expected to:

• Coordinate with risk management and compliance

• Avoid duplication

• Provide an integrated view of assurance coverage

Lack of coordination raises questions about efficiency and strategic oversight.

Measurable Impact, Not Just Activity

Boards are moving away from metrics such as:

• Number of audits completed

• Percentage of plan delivered

Instead, they ask:

• Did audit work lead to better decisions?

• Were major risks reduced or avoided?

• Did governance maturity improve?

If internal audit cannot articulate its impact in these terms, skepticism grows.

The Role of External Support and Perspective

To meet rising expectations, some organizations seek targeted external support to strengthen internal audit maturity, methodology, or specialized skills. This may include benchmarking, co-sourcing, or transformation initiatives supported by an experienced internal audit firm that understands both international standards and the Saudi regulatory environment.

Others engage advisory support from entities such as Insights KSA consulting company in Riyadh to realign audit functions with board expectations and national governance priorities. In more specialized scenarios, boards may also look to a seasoned consultant internal audit professional to address capability gaps, technology risks, or audit function redesign.

The intent is not outsourcing accountability, but enhancing internal audit’s ability to deliver credible, high-impact assurance.

A Shift in the Board–Internal Audit Relationship

Ultimately, boards in KSA are not questioning internal audit out of doubt—they are questioning it out of ambition. As governance standards rise and national transformation accelerates, internal audit is expected to evolve from a traditional control function into a strategic partner in assurance.

This shift requires:

• Courage to challenge

• Skills to assess complex risks

• Communication that resonates at board level

• A clear line of sight between audit work and organizational value

Where this evolution lags, boardroom questions follow. Where it succeeds, internal audit becomes one of the most trusted voices in the governance ecosystem.

Also Read:

• Why Do Internal Audit Issues Escalate Before Management Takes Action in KSA?

• Is Your Internal Audit Function Independent Enough to Be Effective?