Purpose This paper aims to gain an in-depth understanding of how the internal audit function evolves in an increasingly digitalised business environment. Design/methodology/approach This paper is based on 29 semi-structured interviews with members of management committees and internal auditors based in Belgium. Findings The analysis reveals that a digitalised business environment affects the internal audit function in three respects. First, it impacts its scope. The agility of the internal audit planning and the required digital knowledge are expected to increase and information technology (IT) risks gain importance, especially cybersecurity threats. Second, the demand for consulting activities performed by internal auditors is higher and third, digitalisation modifies the working practices of internal auditors in their day-to-day tasks. New technologies such as data analytics tools are being implemented progressively in internal audit departments and digital skills are considered a critical asset. Research limitations/implications This research was conducted in the European Union and gathers opinions of members of management committees and internal auditors. Future research could focus on other internal auditing stakeholders in other legal contexts. Practical implications The internal audit function needs to integrate IT and data analytics skills. In addition, the internal audit function should develop consulting activities to help organisations deal with the digitalisation of the business environment. Originality/value The impact of digitalisation on the internal audit function and its effect on internal audit practices is an underexplored area.

Purpose This paper aims to investigate how the internal audit function (IAF) modifies its activities and practices in relation to the digitalisation the organisation. This paper specifically examines the use of data analytics and the performance of consulting activities by internal auditors. Design/methodology/approach This paper is based on a survey conducted with 82 chief audit executives based in the USA and members of the institute of internal auditors. Findings Results indicate a positive relation between the organisation’s level of digitalisation and the use of data analytics by internal auditors during their missions. Results also indicate that the organisation’s level of digitalisation has an indirect effect on the proportion of the internal audit planning dedicated to consulting activities. Specifically, the use of data analytics mediates the relationship between the organisation’s level of digitalisation and the proportion of the internal audit planning dedicated to consulting activities. Research limitations/implications This research was conducted amongst internal auditors based in the US Future research could investigate the insights of other internal audit stakeholders and investigate different legal contexts. Practical implications Results show that digitalisation increases the use of data analytics by internal auditors and the performance of consulting activities. The results, therefore, highlight the importance of these two aspects for the IAF to continue to bring value to organisations. Originality/value This research provides more insights on internal audit working practices. The digitalisation of the organisation leads the IAF to use more data analytics and perform more consulting activities.

Purpose This research paper aims to investigate the effects of internal audit’s (IA) use of data analytics and the performance of consulting activities on perceived IA quality. Design/methodology/approach The authors conduct a 2 × 2 between-subjects experiment among upper and middle managers where the use of data analytics and the performance of consulting activities by internal auditors are manipulated. Findings Results highlight the importance of internal auditor use of data analytics and performance of consulting activities to improve perceived IA quality. First, managers perceive internal auditors as more competent when the auditors use data analytics. Second, managers perceive internal auditors’ recommendations as more relevant when the auditors perform consulting activities. Finally, managers perceive an improvement in the quality of relationships with internal auditors when auditors perform consulting activities, which is strengthened when internal auditors combine the use of data analytics and the performance of consulting activities. Research limitations/implications From a theoretical perspective, this research builds on the IA quality framework by considering digitalization as a contextual factor. This research focused on the perceptions of one major stakeholder of the IA function: senior management. Future research should investigate the perceptions of other stakeholders and other contextual factors. Practical implications This research suggests that internal auditors should prioritize the development of the consulting role in their function and develop their digital expertise, especially expertise in data analytics, to improve perceived IA quality. Originality/value This research tests the impacts of the use of data analytics and the performance of consulting activities on perceived IA quality holistically, by testing Trotman and Duncan’s (2018) framework using an experiment.