Risk Based Internal Auditing That Enhances Compliance

 

In a regulatory environment that keeps evolving rapidly in Saudi Arabia, adopting a risk based internal audit approach is no longer optional for organizations that want robust compliance and resilient operations. This article explains what risk based internal auditing consulting services means in practice for KSA organisations, why it improves compliance, how to implement it, and the measurable benefits you can expect. It also highlights recent 2025 figures and market data relevant to audit leaders and board members in the kingdom.

Why shift to risk based internal auditing now

Risk based internal auditing focuses audit activity on the processes and controls that pose the greatest threat to achieving strategic objectives and regulatory compliance. This focus helps internal audit add more value by aligning assurance with the organisation’s top risks and regulator expectations. External research and industry surveys in 2025 show that internal audit functions are being asked to take on broader responsibilities such as fraud oversight and enterprise risk management which makes a targeted, risk based approach essential. Almost 90 percent of chief audit executives reported responsibilities beyond traditional audit such as fraud and compliance tasks, and about 33 percent now carry accountability for enterprise risk management. 

For organisations in KSA the pressure to modernise compliance is also driven by national policy and private sector regulation. The governance risk and compliance platform market in Saudi Arabia reached approximately USD 493.4 million in 2025, reflecting rising investment in tools that support compliance, monitoring, and risk management. This growth underscores how regulators and companies are investing to meet higher standards.

If your organisation is evaluating a partner for transforming the internal audit function, consider vendors and advisors experienced in delivering internal audit consulting services that are tailored to risk based methodologies and local regulatory requirements. Use this expertise to build a practical roadmap that connects risks to audit priorities and to measurable compliance outcomes.

What risk based internal auditing looks like in practice

A practical risk based internal audit program has several characteristic elements

Audit planning that starts with a dynamic enterprise risk assessment and then maps high impact risks to audit priorities. Use a combination of management risk registers, regulator insights, and data analytics to rank risks by likelihood and impact.

Resource allocation that focuses skilled auditors and data analytics where they will yield the highest assurance per unit of effort. This is where partnering with internal audit consulting services can speed capability building and deliver targeted frameworks.

A continuous assurance mindset where key controls are monitored by automated tests and data analytics so that internal auditors can escalate emerging issues early.

Integrated reporting that links audit findings to compliance status, regulatory obligations, remediation progress, and residual risk levels presented to the audit committee and executive management.

These practical shifts change internal audit from a periodic checklist activity to an ongoing assurance and advisory function that helps the organisation stay compliant under evolving rules.

The compliance case for risk based internal auditing

There are three compliance advantages that matter most for KSA organisations

First, efficiency and focus. Audit resources are finite. By concentrating on the areas where regulatory breaches or control failures would cause the greatest harm auditors generate higher confidence per audit hour. This is especially important for sectors with heavy regulation such as financial services and healthcare.

Second, earlier detection and remediation. Continuous monitoring and targeted testing uncover issues earlier, reducing the time regulators, customers, or stakeholders may be exposed to compliance failures.

Third, stronger board assurance. Boards and audit committees increasingly demand evidence that internal audit aligns with top risks and regulatory priorities. Risk based internal auditing produces clearer metrics and risk trending that boards can rely on when demonstrating sound governance.

Recent global surveys in 2025 also highlight the top risk themes internal audit functions face such as cyber risk, third party risk, and talent shortages. These trends matter for KSA organisations as they expand digital transformation projects under Vision 2030 initiatives and increase third party vendor relationships. Protiviti’s 2025 top risks research underscores cyber threats and third party risk as top items for chief audit executives.

How to build a risk based internal audit plan in KSA

Step one establish a risk universe that reflects regulatory obligations and strategic objectives. Include regulator guidance from SAMA, the Capital Market Authority, and other relevant authorities depending on sector. Use the OECD corporate governance country notes and local regulation summaries to ensure governance and compliance items are included.

Step two performs a risk assessment that combines quantitative scoring with management input and external intelligence. Quantitative inputs might include financial exposure, volume of transactions, number of third party contracts, and past incident history.

Step three prioritizes audits by risk ranking and residual exposure. Your plan should reserve capacity for urgent emerging risk reviews such as cyber incident response audits.

Step four adopts analytics and continuous controls testing to reduce manual testing. The 2025 pulse reports show that data analytics are now central to modern audit functions and are often the difference between reactive and proactive assurance.

Step five report on compliance outcomes, not just findings. Present remediation timeliness, control effectiveness scores, and regulatory readiness metrics to the audit committee.

During each step, organisations that lack internal resources often engage internal audit consulting services to accelerate design and introduce best practices and tools. Bringing external expertise can be especially helpful for developing data driven audit procedures and for training teams in new methodologies.

Measurement and quantitative targets to track success

To demonstrate value and improved compliance, use measurable targets such as

Control effectiveness score improvements for the top 10 risks within 12 months. The number of high risk findings has reduced year on year. Percentage of regulatory deadlines met for remediation actions. Time to remediate high priority control failures measured in days. Coverage of real time monitoring for core controls.

Benchmarks and market data help set realistic targets. For example, investment in governance and compliance platforms in Saudi Arabia reached nearly half a billion US dollars in 2025 which shows the market appetite for technology-enabled compliance and monitoring.

You may also align internal audit KPIs with IIA pulse benchmarks on audit responsibilities and technology adoption so your targets are comparable to industry practice. The 2025 IIA pulse findings show that internal audit roles are expanding into fraud and enterprise risk management which has implications for workload and performance metrics.

Common challenges and how to overcome them

Challenge one limited skill in data analytics and continuous monitoring. Overcome this by training, hiring, or contracting specialists through internal audit consulting services that bring practical tools and templates.

Challenge two insufficient integration with risk and compliance functions. Solve this by embedding regular information exchanges and joint risk workshops so that audit plans are co-owned with risk and compliance colleagues.

Challenge three stakeholder expectations for audits that guarantee compliance. Set realistic expectations by explaining the residual risk concept, showing how assurance reduces but cannot eliminate all risk, and by reporting progress with objective metrics.

Role of advisors and consulting partners

When you need to accelerate a transition to a risk based model, partnering with experienced providers can speed adoption and reduce implementation risk. Internal audit consulting services often help with risk taxonomy design, analytics based testing, audit automation and training for auditors so they can deliver advisory style assurance. In the KSA market where regulatory requirements are evolving, the right partner will bring local regulatory knowledge as well as global best practice. Consider engaging external advisors to run a pilot on a high priority risk area to demonstrate quick wins before scaling across the function.

Regional perspective and regulatory context for KSA

Saudi Arabia’s corporate governance and regulatory environment has seen material updates that affect audit and compliance practices. International and local guidance emphasises stronger governance and risk oversight which raises expectations of internal audit functions. At the same time organisations are increasing spend on tools to manage governance, risk and compliance reflecting a market shift to technology enabled assurance. These dynamics make risk based internal auditing a strategic enabler for compliance and for demonstrating sound governance to regulators and investors.

Practical checklist for quick wins

Map the top ten enterprise risks to planned audits and ongoing monitoring. Introduce at least one analytics based test for a high volume control within 90 days. Create an executive dashboard showing remediation age and control effectiveness for the top five regulatory obligations. Pilot a third party risk assurance review covering the largest vendors by spend within six months.

Call to action

If you want to convert risk into measurable assurance and strengthen regulatory readiness in KSA, partner with an expert that blends local regulatory insight and practical implementation skills. Contact an insight consultancy team that combines internal audit consulting services and local market knowledge to help you build a risk based audit program that improves compliance and governance outcomes.

Closing thoughts

Risk based internal auditing is not just a technique it is a strategic shift in how assurance is delivered. For organisations in Saudi Arabia that face accelerating digital transformation and evolving regulation, adopting a focused, analytics enabled, and continuously monitored audit approach will produce stronger compliance, faster remediation, and clearer assurance for boards and regulators. As internal audit roles expand into advisory and enterprise risk work, the right mix of internal capability and specialist partners will determine how effectively organisations convert audit activity into trusted compliance outcomes. Call on experienced advisors and adopt measurable targets to ensure your risk based auditing strengthens the governance and compliance backbone of your organisation.