Audit Planning; Aligning Risk and Strategy in KSA

 

Internal Audit Services

Why Strategic Audit Planning Matters in the Kingdom of Saudi Arabia

In today’s complex governance environment, an internal audit firm’s role goes far beyond traditional compliance checks. In the Kingdom of Saudi Arabia (KSA), where economic transformation under Vision 2030 is reshaping corporate strategies and regulatory landscapes, effective audit planning must align risk assessment with strategic objectives to drive governance excellence and sustainable performance. This alignment is not a luxury but a necessity, as organizations seek to fortify control environments, anticipate emerging threats, and support decision-making at the highest levels. Insights Advisory, a thought leader in internal audit strategy, underscores that audit planning becomes truly impactful when it connects risk insights with business strategy and organisational priorities.

A well-structured internal audit plan helps organisations anticipate risks, allocate resources efficiently, and provide assurance that strategic goals are achievable within risk tolerances. In KSA, recent developments in corporate governance regulations mandate more robust audit planning, requiring corporations to adopt risk-based audit methodologies that emphasize strategic risk coverage, internal control efficacy, and stakeholder trust.

Understanding Audit Planning: From Compliance to Strategic Enabler

Audit planning traditionally focused on regulatory compliance and historical control testing. However, the scope has evolved significantly in KSA. Today’s audit planning is driven by risk dynamics rather than merely procedural checklists. A leading internal audit firm approaches audit planning through a dynamic and forward-looking lens that prioritises business risks that could impede an organisation’s strategic trajectory.

At the heart of audit planning lies risk assessment, the systematic identification and evaluation of risks that could undermine financial reporting, operational effectiveness, reputation, and strategic execution. Saudi organisations increasingly embrace risk based internal auditing (RBIA) because it shifts audit teams from routine control checks to strategic engagement, encompassing enterprise risk, digital threats, and ESG (Environmental, Social, Governance) concerns.

This strategic orientation requires internal audit functions to collaborate closely with enterprise risk management (ERM) units, executive leadership, and audit committees to shape audit priorities that reflect organisational risk appetite and long-term strategy.

The Strategic Framework for Audit Planning in KSA

1. Enterprise Risk Assessment and Prioritisation

A foundational step in audit planning is developing a comprehensive enterprise risk assessment. In Saudi Arabia, factors such as cybersecurity threats, operational disruptions, and governance risks are increasingly significant. Recent surveys show that a large proportion of organisations consider liquidity or financial risk as primary threats, followed by operational and digital risks.

Effective risk assessments quantify risk likelihood and impact, enabling an internal audit firm to prioritise audit coverage where the strategic stakes are highest. This ensures finite audit resources are applied where they yield the greatest assurance and risk mitigation value.

2. Aligning Audit Plan with Organisational Strategy

Once risks are identified, internal audit professionals must map these risks to strategic objectives. Audit planning must integrate risk responses with strategic goals such as market expansion, operational optimisation, regulatory compliance, and innovation adoption. By doing so, audits validate not only the existence of controls but also their alignment with strategic drivers.

Audit planning that is harmonised with organisational strategy provides boards and executive teams with insights into how well risk management mechanisms support strategic execution. This enhances governance quality and elevates internal audit from a control tester to a strategic partner.

3. Integration with Enterprise Risk Management and Governance Bodies

Integration with ERM and governance bodies reinforces the strategic relevance of audit planning. Internal audit functions in KSA are increasingly collaborating with risk management teams to ensure consistent risk taxonomy, common risk heat maps, and shared risk scoring. This collaboration reduces duplicative efforts and enhances cross-functional insight into emerging risk exposures.

Board audit committees play a pivotal role in this ecosystem. They are responsible for guiding internal audit priorities, ensuring strategic risks are addressed, and supporting audit resourcing decisions consistent with risk appetite.

Regulatory Context and Its Impact on Audit Planning

The regulatory environment in KSA has evolved to emphasize comprehensive governance frameworks. Corporate governance reforms introduced by the Capital Market Authority now require companies to maintain internal audit units, develop risk-based audit plans, and provide periodic audit reports.

These changes elevate audit planning from an internal process to a regulatory expectation, where boards, audit committees, and audit leaders must ensure compliance with governance codes and disclosure requirements. Additionally, the Saudi Central Bank (SAMA) introduced updated audit and compliance principles for financial institutions, reinforcing governance norms across critical sectors.

This regulatory push means audit planning must not only be strategic but also compliant with evolving standards. Organisations that fail to align audit plans with regulatory expectations risk governance gaps and heightened oversight scrutiny.

Emerging Risks Shaping Audit Planning in 2025–2026

Digital Transformation and Cybersecurity

Digital transformation in Saudi enterprises brings new opportunities and risks. Audit functions must assess whether risk identification processes adequately capture cyber threats, data privacy issues, and technology implementation risks. However, a significant share of companies still lack cybersecurity expertise within their internal audit teams.

AI and advanced analytics are also reshaping risk profiles. While many CAEs consider data analytics essential, only a minority report high capability levels in analytics adoption.

Governance, ESG, and Sustainability Risks

As ESG considerations gain prominence, internal audit plans are increasingly tasked with evaluating governance structures supporting sustainability initiatives. This broadens audit planning beyond financial controls to include non-financial assurance.

Operational and Strategic Risks

Operational risks such as vendor concentration, supply chain disruptions, and talent challenges have become critical in audit planning. Recent enterprise risk management surveys reveal persistent pressures from technology adoption and regulatory compliance as strategic risk categories.

Quantitative Insights for Audit Planning

To ground audit strategies in measurable data, organisations in KSA are leveraging current metrics. According to industry reports:

  • Approximately 90 percent of Chief Audit Executives in 2025 are tasked with responsibilities beyond traditional internal audit roles, such as ethics and fraud oversight. 

  • About 33 percent of CAEs now oversee enterprise risk management, a sizable increase from prior years.

  • A Sonar survey revealed that 26 percent of organisations have yet to incorporate IT audits into their internal audit plans, and 44 percent lack in-house IT or cybersecurity expertise in their audit functions.

  • Tadawul’s market capitalisation had reached approximately 9660 billion Saudi riyals by late 2025, reflecting the scale and scrutiny of corporate governance in listed entities. 

These figures highlight why audit plans must be grounded in quantifiable risk indicators and aligned with market expectations.

Best Practices for Internal Audit Firms in KSA

Risk-Based Planning

Adopt a risk-based methodology that links audit objectives to organisational risk appetite and strategy. This ensures that audit work addresses critical risk areas with material impact.

Data Analytics and Continuous Monitoring

Use analytics and continuous auditing techniques to elevate risk detection and reduce control weaknesses proactively.

Capability Enhancement

Invest in building internal competencies, especially in areas such as digital risk, cybersecurity, and ESG assurance.

Engage External Expertise

Where internal capabilities are limited, partnering with strategic advisors or specialised auditors can strengthen audit coverage and bring global best practices.

Elevating Strategy Through Modern Audit Planning

In an environment of rapid economic transformation and regulatory intensification, audit planning in Saudi Arabia must align risk insights with strategy to deliver real value. An internal audit firm that integrates risk based auditing, embraces digital competencies, and collaborates across governance structures can transform audit planning into a strategic enabler of organisational resilience and performance.

As organisations adapt to challenges and opportunities across sectors, Insights Advisory continues to champion a holistic approach to audit planning, one that combines rigorous risk assessment, strategic alignment, and data-driven decision support. With quantifiable indicators from 2025 and into 2026 underscoring the need for forward-looking audit strategies, stakeholders must prioritise audit planning as a cornerstone of governance, risk management, and sustainable growth.

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