Internal Audit Budgets Grow Yet Cyber and AI Skill Gaps Strain Capacity

Internal audit budgets rise, but cyber and AI skill shortages limit the function’s ability to meet growing risk demands.

About two‑thirds of internal audit leaders say their budgets will rise in 2026, and 43% plan to increase staff, according to a Sikich survey. Despite the funding boost, the expanding audit remit is outpacing resources, with cybersecurity remaining the top emerging risk at 43% of respondents, up from 41% last year. AI and automation concerns stay steady at 35%, while regulatory compliance concerns rise to 25%.

The survey also highlights a deepening talent shortage: 64% of leaders cite a lack of technical expertise in cyber and AI as the main hiring and retention obstacle, and 43% point to limited time, budget and resources as implementation barriers. Consequently, 82% of audit functions now rely on external partners, and most audit plans now incorporate business resilience, third‑party risk and AI assessments.

Source: Corporate Compliance Insights

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