The Impact of Rapid Digital Transformation on Internal Audit Practices in Saudi Arabia
A groundbreaking study conducted by KPMG has shed light on the seismic influence of rapid digital transformation and technological advancements, particularly the rise of artificial intelligence (AI), on internal audit practices within the Kingdom of Saudi Arabia.
The report delves into the critical technology risks that internal auditors need to tackle head-on. With organizations increasingly relying on big data, cloud computing, and AI, safeguarding corporate and personal data from cyber threats has become paramount. Data privacy concerns are at the forefront, especially with new laws mandating Saudi-owned data to be stored within the Kingdom. Internal auditors are instrumental in ensuring compliance with these regulations.
The emergence of AI and open data platforms brings new challenges to data privacy, necessitating auditors to grasp and mitigate these risks effectively. Moreover, the rapidly evolving technological and business landscape requires internal auditors to stay abreast of the latest developments to implement robust control measures.
Shadi Abuserryeh, Head of Financial Risk Management at KPMG, remarked, “Saudi Arabia is experiencing a rapid digital transformation, prompting internal audit functions to shift from traditional manual processes to technology-driven approaches. This transition is crucial for adapting to the changing business environment and regulatory demands, ensuring the establishment of strong control environments. Integrating AI-powered controls aligns with the vision of Saudi Vision 2030, where AI is projected to generate US$90 billion globally, with a growth rate of 45%.”
The report underscores the transformative impact of technology on internal audit practices, presenting a blend of challenges and opportunities. The extensive automation and integration of technology across operational frameworks proved to be essential during the Covid-19 pandemic, where remote audits became the norm. Collaboration among internal audit, IT, and risk management units has surged, boosting audit practice effectiveness. Additionally, the continuous enhancement of technical skills among internal auditors is crucial to address emerging technology risks and leverage AI solutions effectively.
Abuserryeh further added, “Despite the obstacles, internal audit functions must evolve to keep pace with technological advancements. Business leaders must adopt innovative tools and strategies to mitigate risks and seize opportunities, ensuring that internal audit remains a pivotal partner in organizational success.”
The report also stresses the significance of continuous monitoring and real-time data analysis. With advancements in AI and machine learning, internal auditors can revolutionize their practices by utilizing data analytics to process large data sets more efficiently, unlocking valuable insights on trends.
Moving forward, the report highlights the imperative for internal auditors to embrace technology and adapt to the dynamic business landscape. By leveraging robust IT infrastructures, governance frameworks, and advanced tools like data analytics, internal auditors can provide invaluable insights and drive organizational success.
