Beyond the Checklist: How Internal Audit Drives Risk Culture and Strategic Value in 2025

For decades, many organizations viewed Internal Audit (IA) as a "police" function—a necessary cost to tick compliance boxes.

As of January 9, 2025, that view is officially obsolete.

With the effective date of the new Global Internal Audit Standards (GIAS), the profession has undergone its biggest transformation in years. The new standards, fully endorsed by the Saudi Authority of Internal Auditors (SAIA), mandate that auditors do more than just check numbers; they must now align with business strategy, assess organizational culture, and advise the Board on future risks.

At LUMEN Audit & Advisory, we are helping Saudi enterprises transition to this new model. Here is why your audit function needs an upgrade in 2025.

1. The Shift: From "Policing" to "Strategic Planning"

The most significant change in the 2025 Standards is Principle 9: Plan Strategically.

Previously, audit plans were often recycled from year to year. Now, the Chief Audit Executive (CAE) is required to create a strategic plan that aligns directly with the organization’s long-term goals.

The Old Way: "We will audit the procurement department because we do it every year."

The 2025 Way: "We will audit the procurement department because supply chain resilience is a key risk to our 2030 expansion strategy."

If your internal audit team is not asking about your 5-year business strategy, they are no longer compliant with global standards.

2. Mandatory Governance for Saudi Companies

This global shift aligns perfectly with local regulations. The Capital Market Authority (CMA) has increasingly tightened Corporate Governance Regulations (CGR). As of recent amendments, having an independent, effective internal audit unit is mandatory for listed companies (Articles 73-75 of CGR).

For private family businesses and SMEs eyeing an IPO or foreign investment, adopting these standards now is critical. International investors view a GIAS-compliant audit function as a "seal of quality" for governance.

3. Auditing "Soft" Risks: Culture and ESG

In 2025, auditors are expected to enter the Boardroom and discuss "Risk Culture."

The new standards emphasize Domain II: Ethics and Professionalism, requiring auditors to assess whether the organization's culture promotes ethical decision-making. Furthermore, ESG (Environmental, Social, and Governance) risks are no longer optional. The standards require auditors to assess the reliability of non-financial reporting, such as sustainability data. > Key Question for CEOs: Can your current auditor objectively tell you if your company culture encourages fraud or silence? The new standards require them to.

4. What Should You Do Now?

The "grace period" for the new standards has begun, but the expectation for quality is immediate. To ensure your organization is ready:

Conduct a Gap Analysis: Compare your current Internal Audit Charter against the 5 new Domains of the GIAS.

Empower Your Audit Committee: Ensure they understand their new oversight responsibilities under Domain III.

Update Your Audit Plan: Does your 2025 plan explicitly link to your corporate strategy?

Conclusion: An Asset, Not a Cost

The 2025 Global Internal Audit Standards are a blueprint for value. They turn your audit department into a strategic partner that helps you navigate risks—from cybersecurity to regulatory changes—before they become crises.