Internal Audits Strengthening Governance in Saudi Arabia

Internal Audit Services

Internal Audits and Governance in Saudi Arabia

In the rapidly evolving economic and regulatory landscape of Saudi Arabia, internal audits play a pivotal role in reinforcing corporate governance and ensuring robust accountability across both public and private sectors. As organisations strive for operational excellence and transparency under Vision Two Three Zero, the significance of internal audit functions has never been greater. With an increased focus on regulatory compliance, risk identification, and strategic alignment, businesses and government entities alike are turning to internal auditing as a strategic lever for sustainable growth. The emergence of internal audit consulting services has further augmented this transformation by providing expert guidance, enabling organisations to adopt global best practices efficiently. According to the OECD Corporate Governance Factbook Two Zero Two Five, Saudi Arabia’s Capital Market Authority has implemented updated mandatory requirements for listed companies to establish internal audit units and develop internal audit plans as part of strengthened governance norms. These reforms underscore the Kingdom’s commitment to elevating oversight mechanisms and enhancing investor confidence in its markets.

Amidst this evolution, the role of internal audits has expanded beyond traditional compliance checks to strategic risk assessment and performance evaluation. A Financial consultancy Firm operating within the Kingdom has observed a marked increase in demand for comprehensive audit frameworks that integrate advanced analytics, digital capabilities, and forward-looking risk insights. Such frameworks empower boards and audit committees to make data-driven decisions that uphold governance standards and align with stakeholders’ expectations.

The Strategic Role of Internal Audits in Governance

Beyond Compliance: From Control to Strategic Partner

Internal audits are no longer confined to verifying compliance with financial standards or internal policies. In Saudi organisations, they now function as a strategic partner that assesses whether governance structures support business objectives and risk-management frameworks comprehensively. Contemporary internal audit teams evaluate not just “what went wrong,” but also “what could go wrong,” enabling leaders to anticipate disruptions and seize opportunities. 

This strategic shift has made internal audit an indispensable pillar for governance, risk management, and organisational resilience. Audit committees increasingly rely on insights from internal auditors to refine governance frameworks, streamline reporting, and assess cultural and operational risks. As a result, internal audit functions are engaging more frequently with senior management and boards to deliver insights that drive value, not just oversight.

Quantitative Insights from Saudi Arabia

The internal audit landscape in Saudi Arabia is underpinned by data that reflects both progress and ongoing challenges. A recent survey conducted in cooperation with the Saudi Institute of Internal Auditors revealed that forty four percent of organisations lack personnel with IT or cybersecurity expertise within their internal audit functions, and twenty six percent do not consider IT audits as part of their annual plans. This highlights a critical need for talent development in areas integral to digital risk management.

Furthermore, seventy one percent of audit committees agree that their expertise adds tangible value and governance oversight, demonstrating the growing maturity of governance practices within the Kingdom’s institutions.

Internal Audits in Practice: Public and Private Sector Initiatives

Government Initiatives and Forums

Saudi Arabia’s public sector has amplified its commitment to audit excellence through national programmes and thought leadership platforms. In May Two Zero Two Five, the Kingdom hosted the Sixth Internal Audit Forum in Riyadh, bringing together over five hundred fifty government and audit leaders to discuss innovations, digital tools, and best practices in internal audit. This forum reinforced the public sector’s dedication to transparency and institutional excellence.

Training and capacity-building efforts also reflect this commitment. The Saudi Ministry of Finance’s Self-Audit Program Two Zero Two Five concluded with two hundred fifty one financial practitioners participating in specialised tracks covering risk management, governance, and internal control. Such programmes cultivate a skilled cohort of professionals capable of embedding strong governance practices across government entities. 

Private Sector Engagement and Global Integration

In the private sector, internal audit functions are crucial for meeting investor expectations and regulatory reporting standards. Organisations listed on the Saudi Exchange have increased disclosures on sustainability and governance matters, with sixty five percent of the top one hundred Main Market issuers providing sustainability disclosures, up from fifty eight percent in the previous year. This improvement signals a broader integration of internal audits into governance and ESG reporting processes.

Private sector leaders are also investing in digital audit technologies and data analytics capabilities, recognising them as essential tools for proactive risk assessment and enhanced assurance.

How Internal Audit Consulting Services Enhance Governance

Bridging Capability Gaps and Enabling Best Practices

A mature internal audit function requires diverse skill sets, sophisticated methodologies, and alignment with international standards. This is where internal audit consulting services become invaluable. Consultants help organisations design risk-based audit plans, integrate advanced analytics tools, and develop competency frameworks that are aligned with global standards. These services also provide specialised expertise in areas such as IT audit, fraud risk management, and enterprise risk management.

By bringing external perspectives and benchmarked insights, consultancy engagements accelerate capability building within internal audit teams and ensure that audit outputs contribute meaningfully to governance improvement.

Challenges and Opportunities in Internal Auditing

Addressing Skills Shortages and Cultural Integration

Despite the progress, internal audit functions in Saudi Arabia face challenges related to skills shortages, particularly in technology and digital risk areas. As organisations adopt more complex systems and digital platforms, internal auditors must evolve their competencies to effectively evaluate cybersecurity controls, data privacy frameworks, and digital governance protocols. The survey data indicating gaps in IT expertise underscores this urgent need.

Cultivating a risk-aware culture that values audit recommendations is another ongoing challenge. Organisations must ensure that audit findings are translated into actionable improvements and that internal audits are viewed not as policing mechanisms, but as partners in organisational growth.

Leveraging Technology for Enhanced Governance

Advanced technologies such as artificial intelligence, data analytics, and continuous audit tools are reshaping the internal audit profession. At the 2025 Internal Audit Forum, the introduction of AI-enabled tools demonstrated how technology can support auditors in data analysis, risk identification, and predictive insights.

By embedding digital tools into audit methodologies, organisations can increase efficiency, accuracy, and effectiveness, enabling audit functions to deliver deeper strategic insights and strengthen governance outcomes.

The Future of Internal Audit in Saudi Arabia

Continuous Improvement and Strategic Alignment

Looking forward, internal audit functions will continue to evolve as strategic enablers of governance and value generation. The role of internal auditors will expand to include performance evaluation, strategic risk forecasting, and advisory support to boards and leadership teams.

Aligned with Vision Two Three Zero, Saudi organisations are expected to further institutionalise governance mechanisms that emphasise transparency, accountability, and long-term sustainability. Internal audits will remain central to this vision, serving as both watchdogs and catalysts for organisational transformation.

Strengthening the Ecosystem Through Professional Development

Developing a robust talent pipeline and fostering professional excellence within the audit community are key to achieving this future vision. Initiatives such as national survey collaborations, international conference participation, and advanced training programmes ensure that internal audit professionals are equipped with the latest skills and global perspectives.

Conclusion: Internal Audits as Pillars of Governance

In summary, internal audits are fundamental to strengthening governance in Saudi Arabia. They provide independent assurance, promote accountability, and empower organisations to align operations with strategic goals. The rise of internal audit consulting services has catalysed this evolution by bridging capability gaps and accelerating the adoption of modern audit practices. Supported by reforms from regulatory authorities and proactive initiatives across sectors, internal audit functions are poised to play an even more influential role in shaping governance standards.

As organisations navigate a dynamic economic environment, partnering with a trusted Financial consultancy Firm can enhance governance outcomes, ensure compliance with regulatory expectations, and elevate stakeholder confidence. Ultimately, robust internal audit practices strengthen the fabric of governance across the Kingdom, contributing to sustainable development and long-term success in Saudi Arabia’s transformative journey.