In the Kingdom of Saudi Arabia today corporate governance and risk management are priorities for businesses seeking resilience in an uncertain global environment. Recent surveys and industry insights show that 62 percent of companies in Saudi Arabia are strengthening internal controls through internal audit functions as a core strategic initiative. This shift reflects not only compliance obligations but also a recognition that effective internal audit frameworks drive performance, accountability and sustainable growth. Consulting services internal audit are playing a central role in helping organizations transform traditional audit functions into strategic value creators. Meanwhile, a Financial consultancy Firm in KSA is uniquely positioned to guide and support these changes through specialized expertise, local insight and global best practices.
In this article you will learn why so many Saudi companies are focusing on internal audit controls in 2025 and 2026, what tangible outcomes are associated with this shift and how internal audit work is evolving to meet regulatory expectations and market demands.
Understanding the Internal Audit Imperative in Saudi Arabia
Internal audit once functioned purely as a compliance assurance resource. Today it is seen as a strategic engine for enterprise risk management and transparency. Organizations across sectors from energy and finance to technology and real estate recognize that strengthening internal controls mitigates operational risk, financial risk and compliance challenges.
Globally internal audit best practices emphasize risk based auditing real time data insights and alignment with organizational strategy. In Saudi Arabia these themes resonate strongly because of evolving governance regulations and investor expectations. Companies that enhance their internal audit functions often collaborate with consulting services internal audit providers to design frameworks that are tailored to their risk landscape. These external partners bring technical expertise and benchmarking data that can elevate control environments beyond internal capabilities.
Strong internal audit functions provide transparent evaluations of business processes, financial reporting and compliance programs. They help detect gaps that could otherwise result in financial misstatements, regulatory penalties or reputational damage. The internal audit function therefore serves dual roles in assurance and advisory. It not only assesses whether controls exist but also makes recommendations to improve processes and fortify risk mitigation strategies.
In the Saudi context ongoing reforms to corporate governance and regulatory frameworks have added urgency to internal audit investments. The Capital Market Authority has revised governance regulations requiring organizations to adopt robust internal audit plans and regular reporting practices. Additionally regulators including the Saudi Central Bank have emphasized stronger internal audit oversight for major financial institutions. These combined pressures elevate internal audit from a traditional back office function to an indispensable part of corporate governance.
Key Drivers of Internal Audit Strengthening in Saudi Companies
Several key factors are driving the 62 percent of Saudi companies that are investing in stronger internal audit controls. Understanding these drivers helps explain not only the statistic itself but also the strategic motivations behind it.
Regulatory Compliance and Corporate Governance
Regulatory updates in Saudi Arabia in recent years have placed internal audit at the center of governance reforms. The Corporate Governance Regulations now require many organizations to establish an internal audit unit, adopt audit planning and provide regular internal audit reports to governing bodies. These requirements align internal audit functions with board oversight and enhance transparency in financial and operational reporting.
This regulatory climate means companies cannot treat internal audit as optional or perfunctory. Instead they must deliver evidence based independent assurance and documented evaluations of their risk and control environments.
Enhanced Risk Environment
Risk factors facing Saudi companies have become more complex. Challenges include macroeconomic volatility evolving fiscal policies, cybersecurity threats and digital transition risks. A significant number of Saudi organizations recognize that internal audit must be part of enterprise risk management rather than a siloed compliance mechanism. Integration of internal audit with enterprise risk management provides a holistic view of risk exposures and allows companies to proactively address risk before it becomes a crisis.
In surveys companies report liquidity and financial risks as top concerns closely followed by operational risk. Internal audit functions are tasked with monitoring these risks continuously and offering management actionable insights into control effectiveness.
Digital Transformation and Data Analytics
Internal audit in Saudi Arabia is also being reshaped by digital transformation. Many organizations are adopting data analytics cloud platforms, robotic process automation and artificial intelligence to enhance audit coverage and deliver high quality insights in real time. A 2024 study found that internal audit departments in up to 80 percent of Saudi companies have taken on or planned digital initiatives to increase audit efficiency and risk oversight.
These digital audit tools allow internal audit professionals to sift through large datasets, identify anomalies and test controls across complex systems with higher accuracy and speed than traditional methods. As a result companies are better able to identify control weaknesses early and implement corrective measures before they escalate into material issues.
Competitive and Investor Expectations
Saudi Arabia has one of the largest stock markets in the Middle East and global investors increasingly evaluate governance practices when making investment decisions. By October 2025 the market capitalization of the Tadawul Saudi Stock Exchange had surpassed nine trillion Saudi riyals reflecting deeper investor participation and scrutiny. Strong internal controls signal to investors that a company prioritizes transparency, accountability and risk management.
In this environment companies that fail to demonstrate robust governance may face challenges in attracting capital achieving favorable credit terms or establishing strategic partnerships.
The Role of Consulting Services Internal Audit
While internal audit teams can be developed in-house many organizations leverage consulting services internal audit because these providers bring cross industry knowledge tested methodologies and specialist skills. Engagement with external audit consulting partners enhances the independence and depth of audit reviews.
Professional consulting services internal audit offerings often include risk assessment frameworks, control evaluations, audit planning and execution as well as training for internal teams. These engagements help firms close control gaps, adopt international standards and integrate new technologies such as automated risk analytics platforms.
External audit consultants also support companies in navigating complex regulatory updates and preparing for external audits or inspections by authorities. Their expertise ensures internal audit activities are aligned with best practices and capable of withstanding third party scrutiny.
Quantitative Data on Internal Audit Trends in 2025 and 2026
Quantitative insights help us understand the scale and impact of strengthened internal audit controls in Saudi Arabia. According to industry surveys over 62 percent of companies in the Kingdom reported that they are enhancing internal controls through expanded audit activities. This figure reflects a growing consensus that robust controls are no longer discretionary but essential to business continuity and compliance.
In the same period up to 80 percent of internal audit departments were engaged in digital initiatives to improve auditing processes and risk analysis. Many of these involve advanced analytics tools, machine learning and continuous monitoring solutions.
Data from audit surveys also highlight gaps that remain in certain areas. Approximately 26 percent of Saudi organizations still do not include IT audit as part of their internal audit plan and nearly 44 percent lack personnel with specialized IT or cybersecurity expertise within the audit function. Addressing these skills gaps is another driver behind increased partnerships with external consulting services, internal audit and financial experts.
Strategic Benefits of Strengthened Internal Controls
The 62 percent of Saudi companies that have increased their internal audit controls are doing so because the benefits extend far beyond compliance.
Better Risk Identification and Mitigation
A robust internal audit function enables early detection of risks across financial operational regulatory and technological domains. This early detection allows companies to mitigate threats before they impact performance. Integrating internal audit with enterprise risk management improves visibility across the risk landscape and fosters proactive decision making.
Enhanced Corporate Governance
Internal audit ensures that governance structures operate effectively. Audits validate whether policies, procedures and internal controls align with strategic objectives and regulatory requirements. This alignment is fundamental to building stakeholder confidence and improving board oversight.
Process Efficiency and Cost Savings
Strengthened internal controls help streamline operations eliminate redundant activities and reduce the likelihood of costly errors and control failures. Over time these improvements lead to quantifiable cost savings and efficiency gains. Audit recommendations often include process redesigns that strengthen controls while optimizing workflow.
Transparency and Investor Confidence
In today’s market investors and lenders place high importance on governance standards and transparency. Companies that demonstrate strong internal controls and audit practices tend to attract better financing conditions and build stronger investor trust. This confidence can translate into higher valuations and more favourable business opportunities.
Because internal audit reporting is an independent evaluation it provides assurance to external stakeholders that the organization is proactively managing its risks and controls.
The Evolving Scope of Internal Audit
The role of internal audit in Saudi Arabia is evolving from traditional financial and compliance reviews toward a broader assurance function. Leading companies now expect internal audits to provide insights into strategic risk emerging technologies, regulatory evolution and sustainability efforts.
Internal audit teams are increasingly involved in evaluating non financial risk areas such as environmental social and governance compliance alongside traditional financial controls. This expanded scope positions audit functions as key strategic partners within organizations.
How Financial Consultancy Firms in KSA Support Internal Audit Excellence
A Financial consultancy Firm in KSA plays a crucial role in helping organizations design, implement and optimize internal audit frameworks. These firms bring specialized knowledge of Saudi regulatory contexts, international best practices and the latest tools and methodologies. Their teams often include seasoned audit professionals, risk management experts and technology specialists who collaborate with corporate audit functions.
Financial consultancy firms support internal audit strengthening through services such as risk assessments control testing audit planning internal audit training and transformation programs. They can also assist companies in adopting continuous auditing and data analytics technologies that support real time insight generation.
In addition to internal audit expertise these firms often provide integrated services such as corporate governance advisory risk management consulting and performance improvement programs. This holistic approach ensures that internal audit recommendations align with broader strategic goals and operational priorities.
Challenges and Opportunities Facing Internal Audit Functions
While many companies have made progress in strengthening internal audit controls there are challenges that remain. One significant challenge is the scarcity of skilled professionals with expertise in areas such as IT audit data analytics and cybersecurity. This skills gap is often cited by audit leaders as a key barrier to fully modernizing audit functions.
Another challenge is the complexity of rapidly evolving regulatory environments. Organizations must continuously update their internal audit approaches to align with new compliance requirements from local regulators and global standards bodies.
However these challenges create opportunities for innovation collaboration and professional growth. Companies investing in training upskilling and partnerships with external experts are better positioned to adapt and thrive.
The fact that 62 percent of KSA companies are strengthening internal controls through internal audit functions is a powerful indicator of how governance risk management and strategic planning are converging in Saudi business strategy. Internal audit is no longer a compliance obligation; it is a strategic enabler of resilience, efficiency , transparency and growth.
Through partnerships with consulting services internal audit providers and support from a Financial consultancy Firm in KSA organizations can build robust internal audit structures that meet regulatory demands and deliver actionable insights. As digital transformation reshapes how audits are conducted and risk landscapes evolve, businesses that invest in strong internal controls will be better equipped to face future challenges with confidence.
Finance Advisory 