Internal Audit Is Being Asked to Do More With Less, According to New Report from The Internal Audit Foundation

LAKE MARY, Fla., March 10, 2026 /PRNewswire/ -- Internal audit functions are increasingly being asked to do more with limited budgets and staff, according to a new survey of senior internal audit leaders released today by The Internal Audit Foundation, sponsored by Optro, formerly AuditBoard. The findings reinforce the critical importance of aligning audit function priorities with organizational objectives and strategy during a time when resources are stretched.  

According to The 2026 North American Pulse of Internal Audit Survey, released today at The IIA's annual Great Audit Minds (GAM) conference in Las Vegas, the percentage of internal audit functions that reported budget cuts rose from 11% to 19% between 2024 and 2025, while those reporting budget increases dropped from 34% to 23%. The percentage of functions reporting staff cuts also rose from 11% to 18%, though interestingly, staff growth remained nearly the same between 2025 and 2025, at around 25%.

Importantly, when internal audit functions are closely aligned to the organization's strategy, they are more likely to be well funded. Funding sufficiency was 30 percentage points higher for internal audit functions that identified as being fully or almost fully aligned with organizational strategy (59%) compared to those that were only somewhat aligned with strategy (29%).

"Our research confirms a direct link between strategic alignment and audit function resourcing," said Anthony Pugliese, President and CEO of The IIA. "Organizations across industries are operating in an environment of constrained budgets and limited staffing. Internal audit is no exception. In this context, alignment with enterprise priorities is not optional — it is essential. Audit functions that anticipate risk, align to strategy, and demonstrate clear value are better positioned to secure the resources needed to deliver high-quality assurance and advisory services."

Nearly 60% of chief audit executives (CAEs) report their functions as fully or almost fully aligned with organizational strategy, with financial services reporting the highest level of alignment (69%) and public administration and manufacturing reporting the lower alignment (50% and 47%, respectively).

Sector-Specific Trends in Budget and Staffing

Notably, financial services was the only sector analyzed in which internal audit budgets remained stable year over year, with 40% reporting budget growth and just 9% reporting cuts.

In contrast, privately held organizations excluding financial services reported budget cuts rising and budget growth falling by 16% each, while publicly traded companies and manufacturing experienced more moderate shifts, with cuts rising from 13% to 20% and budget growth declining by only 5%. Nonprofit organizations, the healthcare industry, educational services and the public sector also reported notable budget cuts and lower budget growth last year.

Staffing trends largely mirrored changes in budget. Financial services bucked the trend with staff growth rebounding after a drop in the prior year – rising from 25% in 2024 to 32% in 2025 - while those with staff cuts remained low at 10%. In contrast, privately held organizations experienced a steep rise in functions reporting staff cuts (from 11% to 28%) and a drop in functions reporting staff growth (from 30% to 17%). In publicly traded organizations, which are larger and usually more stable, the number of functions reporting staff cuts nearly doubled compared to 2024; however, their staff growth has remained relatively steady since 2021.

Audit Priorities and Scope

Despite budgets and staffing largely trending lower across sectors, the internal audit scope is often broad, with roughly 86% of CAEs overseeing at least one area beyond internal audit.

Responsibilities vary widely by sector, with fraud investigation being the most common additional responsibility (47%) followed by ethics or whistleblower program and enterprise risk management (ERM), reported by more than one third of respondents.

In publicly traded companies and manufacturing, Sarbanes-Oxley oversight is a primary responsibility (80% and 70%, respectively).

In terms of audit plan composition, cybersecurity and IT account for roughly 20% of audit effort across most sectors, though slightly less in manufacturing (15%), public sector (16%), and publicly traded companies (16%).

As the scope of internal audit continues to expand, CAEs and practitioners must maintain a strong pulse on their organization's strategic priorities, ensuring alignment not only with the evolving risk landscape with also with core business objectives.

Methodology

The survey for the 2026 Pulse of Internal Audit report was conducted online from October 23 to December 2, 2025. Responses were accepted from the highest-ranking internal auditor within each organization, with a total of 373 responses. 84% percent of responses were sourced from the United States, 13% from Canada, and 3% from the Caribbean.

Download the full 2026 Pulse of Internal Audit Report here.

About The Institute of Internal Auditors and the Internal Audit Foundation

The Institute of Internal Auditors (The IIA) is an international professional association that serves more than 265,000 global members and has awarded more than 200,000 Certified Internal Auditor^® (CIA^®) certifications worldwide. Established in 1941, The IIA is recognized throughout the world as the internal audit profession's leader in standards, certifications, education, research, and technical guidance. For more information, visit theiia.org.

The Internal Audit Foundation is the preeminent global resource, in strategic partnership with The IIA, dedicated to elevating and empowering the internal audit profession by developing cutting-edge research and programs. The Foundation helps current and future internal auditors stay relevant by building and enhancing their skills and knowledge, ensuring organizations are equipped to create, protect, and sustain long-term value. For more information, visit theiia.org/Foundation.

SOURCE The Institute of Internal Auditors