Strong governance is the backbone of sustainable growth in the Kingdom of Saudi Arabia. For organisations across the public sector and private sector, an effective internal audit function does more than check boxes. It anticipates risk, improves decision making, and builds stakeholder confidence. For KSA boards and executives looking to elevate oversight, partnering with an experienced internal audit firm brings specialised skills and independent perspective that drive measurable improvements. Insights consultancy can help translate regulatory change into practical audit plans aligned to strategic priorities.
Why governance matters now in the Kingdom
Saudi Arabia is moving rapidly to modernise capital markets and corporate practices as part of Vision 2030. Regulators have raised expectations for accountability and transparency, and boards are being asked to demonstrate stronger oversight of risk and compliance. These shifts mean internal audit is no longer a back office assurance activity. Instead it plays a proactive role in testing controls, advising on governance design, and validating major transformation programs. Recent regulatory updates now require a clearer line of sight on internal audit planning and reporting by listed entities, reinforcing the need for credible assurance providers.
The regulatory driver and hard numbers to know
Regulatory reform has been explicit about internal audit expectations. In January 2024 the updated corporate governance rules made elements of the internal audit function mandatory for listed companies, including establishing an internal audit unit and preparing an internal audit plan and report. That change has direct consequences for boards and audit committees as they must oversee quality and independence of assurance.
Beyond rule changes there are measurable shifts in disclosure and market structure. For example, regulators reported a clear increase in sustainability disclosures among main market issuers in 2024 and the number of publicly traded companies expanded in recent years, creating a broader population that must meet governance standards. These dynamics increase demand for skilled internal auditors who can support better reporting and risk management.
What a skilled internal audit function delivers
A well resourced internal audit function delivers three outcomes that matter to stakeholders and investors. First it increases confidence by providing independent assurance that controls are working and that major risks are identified. Second it improves operational performance by identifying process inefficiencies and areas where controls constrain value creation. Third, it protects reputation by testing compliance with new regulatory obligations and by continuously monitoring high risk areas such as cybersecurity and third party relationships.
Boards often achieve these outcomes faster by tapping external expertise. An internal audit firm brings specialised domain knowledge and benchmarking data that in house teams may not have. That knowledge becomes particularly valuable when audit teams are asked to test emerging areas such as artificial intelligence governance or complex transformation programs.
Top risk areas internal audit in KSA is focusing on
Recent surveys of internal audit leaders in the Middle East highlight a clear set of priorities. Cybersecurity repeatedly ranks as the top focus area, with governance and corporate reporting also among the top audit priorities. As organisations digitise operations across finance and operations, internal audit must be able to assess technology controls, data governance and vendor risk. Audit plans that do not prioritise these themes risk leaving boards blind to the Kingdom’s most material exposures.
Skills and capabilities to build or buy
To meet today and tomorrow requirements, internal audit teams need a combination of technical audit skills and domain expertise. Key competencies include
- Risk based audit planning and resource allocation that link to strategic objectives.
- Cyber and technology assurance capabilities to test cloud, data privacy and AI enabled processes.
- Financial controls and regulatory compliance expertise that keep pace with evolving rules.
- Data analytics and continuous auditing tools that allow auditors to shift from sampling to near continuous assurance.
- Stakeholder engagement skills so auditors clearly communicate findings and influence remediation.
Organisations can adopt a blended model where core governance oversight remains in house while specialised testing and capability uplift are delivered by external partners. An internal audit firm can supply temporary capacity, help embed data driven audit techniques, and accelerate upskilling for permanent teams.
Technology is a force multiplier not a replacement
Technology amplifies the reach of audit but it also raises new audit challenges. Cloud adoption and greater use of automation require auditors to rethink control frameworks and to test system configurations and identity management. Guidance from advisory firms and local practitioners emphasises that auditors must be fluent in technology risk concepts and must use data analytics tools to detect anomalies. Investment in audit technology and in training yields quick returns in audit coverage and in the speed of reporting to audit committees.
How to measure internal audit effectiveness
Boards and audit committees should use clear performance metrics. Useful indicators include coverage of high risk areas, time to issue and close findings, remediation effectiveness, and stakeholder satisfaction with audit insights. In addition, benchmarking against regional peers provides context for resource levels and scope. When metrics are tied to business objectives, audit becomes a vehicle for improving performance not simply a control check.
Practical steps for boards and executive teams in KSA
- Update the audit charter and plan to reflect regulatory requirements and to prioritise cybersecurity, governance and transformation programs.
- Assess capability gaps across technical, data and industry knowledge and set a two year development roadmap.
- Consider a mixed resourcing model to combine in house continuity with external specialist support.
- Implement audit technology for continuous monitoring and to reduce time spent on manual testing.
- Strengthen audit committee engagement by delivering concise risk based reporting and clear remediation roadmaps.
Boards that take these steps create a culture where internal audit operates as a trusted advisor and a reliable source of independent assurance.
Quantitative context for 2025
To put priorities in perspective, regional survey evidence shows a strong concentration of audit effort on cybersecurity and governance issues. For example, a recent Middle East risk survey identified cybersecurity as one of the top five internal audit priorities for roughly seven out of ten respondents and governance or corporate reporting as a top five priority for more than half of respondents. Regulators continued to tighten expectations for listed companies through 2024 and into 2025 with explicit requirements for internal audit planning and reporting. These shifts underscore why boards should prioritise capability building now.
Why use external expertise and how to choose a partner
Engaging an external partner can accelerate capability uplift and provide immediate access to benchmarking and specialist testing. When selecting a partner, look for proven experience in the Kingdom, clear data analytics capability, a track record in technology risk assessments, and an approach that transfers knowledge to in-house teams rather than replacing them. Local and international firms that combine Saudi market experience with global best practice tend to deliver the best results for complex governance environments.
Final considerations and getting started
Improved governance through skilled internal audits is not a one time project. It is an ongoing investment in the resilience of the organisation. Boards should view internal audit as a strategic partner that helps shape risk appetite, validates control effectiveness and supports transformation. For KSA organisations facing rapid regulatory and digital change, the right mix of in-house capability and external support is essential.
Insights consultancy can help boards and audit committees translate evolving rules into practical audit plans and measurable controls. By aligning audit activity to business objectives and to the regulatory environment, organisations build the confidence that investors and stakeholders expect.
Call to action
For boards and executive teams ready to strengthen governance, consider a short diagnostic review of your internal audit coverage and capability. Our insight advisory team will help prioritise actions that deliver rapid improvement and measurable oversight. Reach out to discuss a tailored approach.
Insights consultancy can provide the practical expertise and local market knowledge you need to accelerate change and to meet the governance expectations of 2025 and beyond.
Finance Advisory 