Internal Audit and AI-Enabled Fraud
Artificial intelligence is transforming how organizations operate while simultaneously enabling faster, more scalable, and more sophisticated forms of fraud. As AI tools are increasingly used to fabricate documents, manipulate audio and video, and deliver highly personalized deception, traditional controls are being outpaced, placing internal audit at a critical turning point.
Three forces are reshaping the fraud risk landscape faster than audit functions can adapt:
- AI is both creating new types of fraud and accelerating traditional schemes at scale.
- Threat sophistication is increasing, with AI enabling deception that is harder to detect and easier to scale across organizations.
- Readiness gaps persist, as many internal audit functions lack the tools, skills, and confidence required to identify and respond to AI-enabled fraud effectively.
The findings in this report reveal a growing awareness of AI-enabled fraud risk, but opportunities to improve internal audit preparedness to address it. Drawing on insights from 373 senior internal audit leaders, the research highlights where understanding remains limited, where barriers constrain action, and how increased familiarity with AI can be leveraged to strengthen detection, control assessment, and advisory impact. Together, these insights outline how internal audit can move beyond reactive responses and take a more proactive role in navigating the evolving AI-driven fraud landscape.
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