The Financial Reporting Council (FRC), the UK's audit regulator, is embarking on a significant transformation of its enforcement strategy. This shift aims to expedite the handling of audit failures and introduce more proportionate responses to minor infractions. The initiative reflects a broader effort to enhance the efficiency and effectiveness of audit oversight in the UK.
The global shift to remote work has fundamentally transformed organizational operations, introducing new cybersecurity challenges. As employees access corporate resources from diverse locations, the traditional security perimeter has expanded, increasing vulnerabilities. Cybersecurity auditing has become crucial in this context, ensuring that security measures are effective and compliant with evolving standards.
The auditing profession is undergoing a significant transformation with the emergence of agentic AI—autonomous systems capable of making decisions and executing tasks with minimal human intervention. Unlike traditional AI, which operates based on predefined rules and human prompts, agentic AI possesses the ability to plan, adapt, and act independently to achieve specified objectives. This evolution presents both unprecedented opportunities and complex challenges for auditors, regulators, and organizations alike.
In 2025, artificial intelligence (AI) is no longer a futuristic concept but a transformative force reshaping the landscape of auditing and assurance. The integration of AI technologies into audit processes is revolutionizing how organizations approach risk assessment, compliance, and financial reporting.
Audit committees are no longer confined to reviewing financial statements and approving external auditors. In 2025, their scope has expanded dramatically, reflecting the broader governance landscape shaped by technology disruption, cyber threats, ESG scrutiny, and regulatory evolution. These committees are now expected to understand and oversee an ever-growing portfolio of complex risks — from AI model transparency and sustainability disclosures to geopolitical volatility and cyber resilience.
Environmental, Social, and Governance (ESG) reporting has transitioned from a voluntary initiative to a critical component of corporate accountability. As stakeholders increasingly demand transparency and authenticity, the accuracy of ESG disclosures has come under intense scrutiny. In 2025, the challenge of greenwashing—where companies exaggerate or fabricate their sustainability efforts—has prompted regulators and assurance providers to enhance their oversight mechanisms.
In today's rapidly evolving technological landscape, artificial intelligence (AI) systems are increasingly integrated into various organizational processes, from decision-making to risk assessment. While AI offers numerous benefits, it also introduces complexities, particularly concerning transparency and accountability. The concept of explainable AI has emerged as a critical factor in ensuring that AI-driven decisions can be understood and trusted by stakeholders.
Artificial Intelligence (AI) has rapidly transitioned from theoretical constructs to integral components of modern enterprises. From supply chain optimization and financial forecasting to automated hiring and customer interactions, AI systems are now deeply embedded in organizational processes. As these technologies evolve, they bring not only unprecedented opportunities but also significant risks, including biases in decision-making, lack of transparency, and unintended consequences from autonomous learning models. Consequently, audit committees are increasingly tasked with the critical responsibility of overseeing and governing these complex systems.
The auditing profession is standing at a pivotal juncture. Around the globe, regulators are rewriting the rules that govern how audits are conducted, disclosed, and interpreted. This isn't merely a series of technical updates—it’s a systemic redefinition of audit’s role in assuring financial integrity, environmental accountability, and enterprise risk governance. From the Public Company Accounting Oversight Board (PCAOB) in the U.S. to the International Auditing and Assurance Standards Board (IAASB) and the European Union, regulators are placing new demands on auditors, internal audit functions, and boards alike.
For over two decades, the Sarbanes-Oxley Act (SOX) has stood as a pillar of financial transparency and accountability. But in 2025, a new wave of modernization is pushing organizations to go beyond check-the-box compliance. As regulatory scrutiny, cyber risks, and operational complexity increase, many companies are transitioning from periodic control testing to real-time internal controls powered by automation, AI, and analytics. This shift is not merely technical—it's strategic.
The audit profession is undergoing a seismic shift. Automation, artificial intelligence (AI), and digital transformation are redefining the skills auditors need to succeed. Traditional competencies are no longer sufficient; auditors must now possess a blend of technical prowess, analytical thinking, and adaptability. This evolution presents a significant challenge: a widening audit talent gap that organizations must address to remain competitive and compliant.
In today's complex business environment, organizations face an array of interconnected risks that span across various domains. Traditional siloed approaches to risk management and auditing are no longer sufficient to address these multifaceted challenges. The concept of "connected risk" has emerged as a strategic imperative, emphasizing the integration of audit and enterprise risk management (ERM) functions to provide a holistic view of organizational risks.
The internal audit landscape is undergoing a seismic shift. With the Institute of Internal Auditors (IIA) releasing its updated Global Internal Audit Standards in 2025, organizations must rethink how assurance functions are aligned with strategy, risk, and performance. These changes are not just tweaks—they redefine how internal auditors create value and foster trust in modern enterprises.
The revised International Standard on Auditing (ISA) 570 marks a significant shift in how auditors assess and report on an entity's ability to continue as a going concern. Released by the IAASB in 2024 and effective for audits of periods beginning on or after December 15, 2026, the updated standard responds to a global call for greater audit transparency, especially after several high-profile collapses exposed blind spots in financial oversight. Auditors are now expected to dig deeper, think more critically, and report more clearly.
Audit committees are entering a transformative era. In 2025, their responsibilities have expanded far beyond overseeing financial statements. These committees now play a central role in managing complex enterprise risks—from cybersecurity and ESG to artificial intelligence and third-party governance. At the same time, the adoption of advanced technologies like AI, continuous monitoring tools, and predictive analytics is reshaping how oversight is conducted.
Internal audit is undergoing a profound transformation. Generative AI is no longer a futuristic concept—it's a present-day force reshaping how audit teams approach assurance, risk, and compliance. Traditional methods centered around checklists and manual sampling are being replaced by intelligent tools capable of synthesizing unstructured data, identifying anomalies, and producing audit-ready insights in minutes.
In today’s fast-moving and interconnected business environment, risk events don’t wait for audit cycles. They happen in real time, often in clusters, across departments and functions. Yet many organizations still rely on siloed systems for audit, risk, and compliance. This fragmented approach creates blind spots, slows down responses, and increases exposure. That’s why a growing number of forward-thinking organizations are turning to Connected Risk. This framework brings together risk-related activities under one coordinated system—fueled by shared data, smarter tools, and cross-functional collaboration. In this article, we explore what Connected Risk really means, how it works, and why it’s quickly becoming essential for modern audit and assurance teams.
Traditionally, organizations treated internal audit, compliance, and risk management as distinct disciplines. Each had its own tools, processes, and lines of reporting. While this setup may have worked when risks were slower and more predictable, it’s increasingly out of step with today’s reality. Complex risks like cyberattacks, supply chain failures, ESG breaches, and regulatory shifts span across teams—and often go undetected when departments operate in isolation. The call for integrated governance is now stronger than ever. Boards and regulators are demanding end-to-end visibility and timely insights. That can only happen when these once-siloed functions align around shared goals, systems, and data.
Connected Risk is an enterprise-wide strategy that links audit, risk, and compliance functions to provide a unified view of risk exposure. Instead of managing risks in isolated spreadsheets or systems, organizations adopt centralized platforms and standardized processes. Information flows freely across teams, giving leaders a real-time understanding of vulnerabilities and control effectiveness. Connected Risk isn’t just a technology play—it’s a cultural and operational shift. It transforms risk oversight from a passive, retrospective function into an active, forward-looking discipline.
Many organizations are stuck with outdated risk architectures. Compliance teams run their checks. Risk managers run theirs. Audit shows up after the fact. By the time findings are shared, the damage is already done or the context has changed. In such environments, duplicated effort, missed signals, and inefficiencies are rampant. This not only affects operational resilience but also credibility with regulators and investors. Connected Risk addresses these issues by linking control owners, assurance providers, and risk leaders in a common framework that supports faster, better decisions.
Internal audit plays a critical role in making Connected Risk a reality. As the function responsible for providing independent assurance, auditors can bring valuable insights into whether risk processes are working as intended. But this role is evolving. Rather than only checking for compliance after the fact, auditors now embed themselves earlier in the risk lifecycle. They collaborate with risk and compliance teams, provide real-time advisory input, and use technology to continuously monitor emerging risks. Certifications such as the Integrated Audit & Assurance Professional (IAAP) from OCEG reflect this shift in expectations and capabilities for audit professionals.
One regional bank found itself overwhelmed with overlapping risk reports from audit, compliance, and operations. With little coordination, it was hard to tell whether high-risk issues were being addressed or just passed between departments. The bank adopted a Connected Risk model by consolidating risk registers, unifying control assessments, and investing in a common GRC platform. Within a year, audit findings dropped by 30%, control issues were resolved faster, and leadership had clear dashboards showing risk trends across the enterprise. Staff also reported higher confidence in the risk process, thanks to improved visibility and less duplication.
Modern technology makes Connected Risk possible. Integrated GRC platforms such as AuditBoard centralize risk registers, audit plans, policies, and compliance requirements. AI-based analytics help surface emerging risks before they escalate. For example, machine learning can flag anomalies in vendor payments, policy breaches, or failed controls across business units. Dashboards bring data to life, showing leadership where the greatest risks lie and what’s being done about them. Cloud-based solutions allow scalability, real-time collaboration, and mobile access—features essential for agile risk response in today’s distributed work environments.
Connected Risk hinges on the ability to integrate data from diverse systems—HR, finance, IT, operations—into a common language of risk. That means aligning taxonomy, establishing a single source of truth, and building interfaces between risk data feeds. For example, linking incident management logs with audit findings helps identify recurring control failures. Connecting HR attrition data with compliance breaches might reveal hotspots in certain departments. The quality and accessibility of data can make or break the Connected Risk vision.
Despite its advantages, transitioning to Connected Risk involves obstacles. Organizations must overcome resistance from teams accustomed to working in silos. Data quality issues and incompatible legacy systems can slow down integration. Cultural factors also play a role—trust, collaboration, and shared goals aren’t automatic. Clear executive sponsorship is crucial. So is change management, training, and the right governance structure to ensure alignment without duplication or overload. Without these foundations, the initiative may stall or become just another layer of bureaucracy.
The payoff for getting Connected Risk right is substantial. It improves agility by helping organizations respond faster to threats. It reduces costs by eliminating redundant efforts and improving resource allocation. It enhances transparency by aligning reporting across departments. Most importantly, it strengthens trust—with regulators, customers, and the board—by demonstrating that risk is actively managed, not just monitored. Research from firms like Deloitte supports the measurable performance improvements achieved through integrated risk governance.
Starting the journey to Connected Risk doesn’t require a full overhaul overnight. Here’s how many successful organizations approach it:
No transformation succeeds without strong leadership, and Connected Risk is no exception. Executives and board members must champion the vision for integrated risk governance. This includes setting clear expectations, aligning incentives, and modeling collaboration across silos. Leadership must also ensure adequate resourcing for the technology, talent, and change management necessary to support the shift. Transparency and trust flow from the top. When leaders emphasize the strategic value of risk intelligence—and treat audit and compliance as enablers rather than enforcers—they lay the cultural foundation for Connected Risk to thrive. Effective communication from the top reinforces why integration matters and how it will benefit both operations and strategy.
Connected Risk is more than a buzzword—it’s a necessary evolution for modern organizations that want to stay ahead of risk while enabling performance. By aligning audit, compliance, and risk functions through shared tools, language, and priorities, organizations build resilience and clarity in an increasingly uncertain world. The path isn’t easy, but the rewards are clear: better insights, faster action, and stronger assurance. For leaders in audit and assurance, embracing Connected Risk isn’t just smart—it’s essential for relevance. As regulatory demands grow and risk interconnectivity deepens, only those organizations that connect the dots will stay prepared. The future belongs to the integrated, and the time to start is now.
Audit committees are facing unprecedented challenges in today's complex business environment. The increasing demands from regulatory bodies, stakeholders, and the rapid pace of technological advancements have significantly expanded their responsibilities. This escalation has led to concerns about audit committee fatigue, where the sheer volume and complexity of issues may compromise the committee's effectiveness.
For over two decades, the Public Company Accounting Oversight Board (PCAOB) has served as a watchdog for the audit industry in the United States. Born out of the Sarbanes-Oxley reforms after Enron, it has enforced rigorous standards, inspected firms, and aimed to restore investor trust.
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