Internal audit is no longer a compliance checkbox, but a strategic advantage.
Key takeaways
Today’s companies need forward-looking insights to increase agility and make smarter decisions.
Internal audit can surface risks before they escalate and align operations with strategic goals.
Traditionally, internal audit has been associated with assurance, which involves reviewing past performance to ensure compliance and control. But in today’s landscape, that’s no longer enough. Organizations need forward-looking insights that help them anticipate disruption, adapt quickly and make smarter decisions. Internal audit, when empowered with the right tools and mindset, can shift from being a retrospective function to a proactive force, surfacing risks before they escalate and aligning operations with strategic goals.
Internal audit is no longer just a compliance checkbox, but a strategic lever. When done right, it can uncover blind spots, strengthen resilience and even unlock competitive advantages. Yet many organizations still underinvest in this function, missing critical risks that could derail growth or damage reputation.
Here are five hidden risks that internal audit can help surface, if you know where to look:
1. Overconfidence in internal controls
The risk: Many companies assume their internal controls are solid, until a breach or compliance failure proves otherwise. Internal audit can reveal gaps in control design, outdated processes or overreliance on manual workarounds that increase exposure.
Why it’s missed: Controls often evolve informally as businesses scale. Without regular, independent review, weaknesses go unnoticed until it’s too late.
2. Operational inefficiencies that drain resources
The risk: Inefficiencies in workflows, systems or resource allocation can quietly erode margins. Internal audit can identify redundancies, bottlenecks or underutilized tools that hinder performance.
Why it’s missed: These inefficiencies often hide in plain sight, especially in hybrid or remote work environments where visibility is limited.
3. Emerging fraud vectors in a digital-first world
The risk: As companies digitize, fraud risks evolve, ranging from credential misuse to artificial intelligence-generated phishing. Internal audit must now assess cybersecurity posture, access controls and behavioral anomalies.
Why it’s missed: Traditional audit approaches may not keep pace with the sophistication of modern fraud tactics. Without tech-enabled auditing, red flags can slip through.
4. Strategic misalignment and blind spots
The risk: Internal audit can reveal whether day-to-day operations align with strategic goals. Misalignment can lead to wasted investments, missed key performance indicators or exposure to risks that weren’t on the radar.
Why it’s missed: Strategic risks are often intangible and cross-functional, making them harder to detect without a holistic, enterprise-wide audit lens.
5. Lack of objective insight in decision making
The risk: Without an independent voice, leadership may miss early warning signs or fail to challenge assumptions. Internal audit provides unbiased insights that can guide smarter, faster decisions.
Why it’s missed: When audit is seen as a compliance function rather than a strategic partner, its insights are undervalued or underutilized.
The strategic case for internal audit
Today’s internal audit teams must be agile, tech-savvy and deeply embedded in the business. With the right investment, such as automation tools, data analytics and skilled talent, internal audit can:
- Enhance risk anticipation.
- Improve operational agility.
- Support strategic execution.
- Strengthen stakeholder trust.
In a world where risk is dynamic and disruption is constant, internal audit isn’t just about looking back—it’s about looking ahead.
Related insights
Are you aware of the risks your business may face?
Conducting risk assessments is crucial for identifying potential threats. RSM’s frameworks help you consistently identify, prioritize and respond to risks, providing key insights into your current exposure and risk posture for informed decision-making.
