Internal Audit KPIs That Truly Measure Performance

 

Internal audit leaders in the Kingdom of Saudi Arabia are under increasing pressure to demonstrate value in quantifiable terms. A well designed set of internal audit KPIs translates activity into outcomes that the board and executive team can understand. For CAEs who work with a consultant internal audit to sharpen their measurement model, the goal is simple and clear: move from counting outputs to measuring outcomes that link to risk reduction, control effectiveness, and strategic alignment. Recent shifts in global standards and local regulation make this agenda urgent for KSA companies and government entities. Insights Advisory has helped clients translate global benchmarks into local KPIs that matter.

Why traditional metrics fail

Typical internal audit scorecards focus on basic activity measures such as number of audits completed, percentage of annual plan executed, and days to issue a report. Those metrics are easy to gather but poor proxies for performance. They reward volume over impact and do not show whether audits reduce the organization's low level or high level risks, or whether management actually implements recommendations. To change that dynamic internal audit functions must adopt KPIs that measure risk coverage, quality of findings, remediation effectiveness, and stakeholder perception. Working with a consultant internal audit can accelerate the shift from activity reporting to outcome measurement by aligning KPIs with the new Global Internal Audit Standards that took effect in January 2025.

Principles for strong internal audit KPIs

Designing KPIs is both a science and an art. Use these seven guiding principles

1. Link to enterprise risk and strategy. KPIs must map to the top enterprise risks and the organization's strategic goals. Internal audit teams aligned with strategy report materially better resourcing outcomes and stakeholder support.

2. Measure effect not effort. Prefer indicators that show change in control effectiveness and remediation outcomes rather than raw counts.

3. Include quality and timeliness dimensions. Combine quality assurance results, peer review outcomes, and promptness of reporting.

4. Use leading and lagging indicators. Leading indicators such as percent of high risk areas covered this quarter help predict future exposure. Lagging indicators such as percent of recommendations implemented measure past success.

5. Make KPIs auditable. Ensure the data source for each KPI is clear and verifiable.

6. Report to stakeholders in a balanced scorecard. Present operational, strategic, and people metrics together so the board sees a full picture.

7. Benchmark against peers and region. KSA firms should benchmark both globally and locally to reflect Vision 2030 priorities and regional regulatory shifts. Insights Advisory frequently recommends dual benchmarking to demonstrate both international best practice and local relevance.

Core KPIs that truly measure performance

Below are recommended KPIs grouped by theme with why they matter and how to measure them

Risk coverage and alignment

Percent of top enterprise risks with audit coverage in the last 12 months
Why it matters This KPI shows whether audit efforts match the organization's highest priorities. Measure by mapping the audit plan to the enterprise risk register and calculating coverage. The Institute of Internal Auditors pulse findings show that alignment with strategy correlates with stronger funding and visibility for internal audit.

Percent of high severity findings per 100 audits
Why it matters It signals whether audits are focusing on areas with material control weakness. Compare year over year to spot improvement or deterioration.

Remediation and impact

Percent of management actions implemented within agreed timeframe
Why it matters Implementation is the clearest signal of audit impact. Track both the percent implemented and the velocity of remediation to show whether management treats audit issues seriously.

Reduction in residual risk score after remediation
Why it matters: Quantifies the actual risk reduction achieved by audit recommendations. This requires modelled residual risk scoring before and after remediation and ties audit activity directly to risk appetite.

Quality and assurance

Internal quality assessment score average
Why it matters: Measures the function of internal quality control and adherence to standards. Use results from internal quality reviews and external assessments.

Findings validated by follow up audits within 12 months
Why it matters: Confirms that findings were accurate and that remediation was effective.

Efficiency and resource management

Percent of audit plan delivered versus planned coverage weighted by risk
Why it matters: Activity completion must be weighted by risk to avoid rewarding low value audits. The IIA 2025 reports highlight the need to focus resources where impact is greatest. 

Cost per audit adjusted for audit complexity
Why it matters: Enables benchmarking of efficiency while controlling for scope and risk.

People and stakeholder indicators

Stakeholder satisfaction score for audit engagements
Why it matters reflects perceived value from management and the audit committee. Combine survey scores with qualitative commentary.

Percent of audit staff with required technical and digital skills
Why it matters As data and cyber risk grow, measuring bench strength is essential. Protiviti and other 2025 studies identify talent and cyber risk as top concerns for audit leaders.

Applying KPIs in the Saudi context

Saudi Arabia is seeing rapid regulatory and governance changes that increase the stakes for robust internal audit measurement. The Saudi market for governance risk and compliance platforms expanded to a market size near USD 493.4 million in 2025 reflecting higher spend on compliance tools and audit technology. At the same time the capital markets authority has moved to require internal audit units and reporting in listed companies which raises baseline expectations for audit performance. These dynamics mean that KSA internal audit functions must show measurable outcomes to remain credible and funded. Insights Advisory works with local clients to translate these trends into measurable KPI targets that board members understand.

Quantitative targets and benchmarking examples for 2025

When setting targets, use a mix of aspirational and achievable thresholds. Example benchmarks drawn from recent industry surveys and pulse reports for 2025 include

• Target at least 90 percent of critical enterprise risks to have had audit coverage within the last 12 months for large listed entities.
• Aim for 80 percent of high severity findings to be implemented within agreed timeframes for well governed organisations.
• Maintain an internal quality assessment average score above 85 percent on audit process indicators.
• Invest in audit technology to keep audit time per engagement stable while increasing coverage of IT and cyber related controls to at least 20 percent of the audit plan given current risk priorities. Recent surveys show cyber and IT audits commonly consume about 17 to 20 percent of audit efforts.

These numbers should be calibrated to organisation size industry and regulatory obligations but provide an actionable starting point for KSA firms that want to demonstrate measurable progress in 2025.

Avoid common measurement traps

Do not over rely on vanity metrics such as number of audits completed or number of recommendations raised. These can create perverse incentives. Do not allow inconsistent scoring methods that make year over year comparison meaningless. Finally, do not ignore data quality. KPIs are only as good as the underlying data. Establishing data owners and clear definitions is essential.

Governance of the KPI program

Assign ownership for the KPI framework to the chief audit executive in partnership with the audit committee. Update KPIs annually and after major regulatory changes. Include KPI definitions in the audit charter and publish a KPI methodology annex so board members and stakeholders understand how metrics are calculated. With new global standards in effect in 2025 there is also a greater emphasis on documented performance measurement approaches that can be defended in external reviews.

Technology and analytics enablers

Adopt audit management systems that can feed dashboard metrics automatically and consider integrating with governance risk and compliance platforms to map audit coverage to risk registers. In KSA the governance risk and compliance market growth reflects increasing availability of these tools and growing regulator focus on digital controls. Use analytics to convert raw finding data into impact measures such as financial exposure reduced or control maturity improvements.

Final checklist to implement KPIs

1. Map each KPI to an audit objective or enterprise risk.

2. Define data sources and owners.

3. Set baseline and stretch targets for 2025 and beyond.

4. Pilot the KPIs with a selection of engagements and adjust definitions.

5. Report to the audit committee quarterly and iterate based on feedback.

6. Periodically benchmark against peers in the region to ensure competitiveness. Insights Advisory recommends an annual benchmarking cadence to keep targets realistic and credible.
   
   

Insights Advisory provides tailored KPI frameworks and benchmarking support for organisations in the Kingdom of Saudi Arabia that want to modernize their internal audit performance measurement.

If you would like practical templates, KPI definitions, and a 90 day rollout plan for your organisation, reach out to insight advisory for a focused implementation engagement.