AuditBoard’s latest IT Risk Outlook for 2026 identifies four critical emerging risks that every IT audit, ITGC and technology-risk function must prioritise: AI governance, cloud complexity, third-party dependency and cybersecurity fatigue. Together, these risks form a high-pressure landscape that places new demands on assurance teams, control owners and audit committees.
AI Model Governance Takes Centre Stage
As organisations integrate machine learning systems and generative AI models across operations, AI governance has rapidly shifted from an experimental function to a core audit concern. AuditBoard highlights that many companies still lack clearly defined ownership for AI systems, adequate model documentation or transparent model change procedures.
For IT audit and ITGC teams, this translates into several priority actions:
- Assess whether AI systems are documented, traceable and subject to version-control.
- Validate that training datasets, model outputs and transformation pipelines have evidence trails.
- Confirm human oversight controls exist for critical or regulated decision making.
- Ensure AI risk registers are aligned with CIA principles - confidentiality, integrity and availability.
With global regulators tightening expectations around automated decision making and data governance, AI oversight is no longer a “future” concern, it is an immediate audit priority.
Cloud Complexity and Fragmentation Create Assurance Blind Spots
Cloud environments are no longer simple single provider deployments. Organisations now operate multi cloud and hybrid cloud architectures, each with different control behaviours, logging formats, identity integrations and resilience assumptions.
AuditBoard’s insights show that many audit teams struggle with:
- Mapping the full cloud estate
- Testing identity and access management across federated services.
- Reviewing configuration drift and misalignments.
- Tracking region specific, compliance specific or vendor specific controls.
Cloud complexity introduces inherent audit challenges, configuration drift, opaque vendor shared responsibility models and decentralised access patterns. ITGC testing must evolve accordingly, with more focus on automated evidence extraction, cloud-native logging and continuous monitoring.
Expanding Third Party Ecosystems Increase Operational Risk
Third party technology risk continues to rise as organisations become more dependent on SaaS, PaaS, offshore development firms and interconnected digital supply chains. AuditBoard emphasises that most organisations significantly underestimate fourth- and fifth-party exposure.
Key audit actions include:
- Reviewing vendor risk scoring and segmentation.
- Ensuring SOC 1/SOC 2 reports are actually read and acted upon.
- Assessing contract clauses for security, continuity and data-residency requirements.
- Validating that critical vendor controls are monitored continuously, not annually.
As third party ecosystems grow, IT audit must evaluate whether governance processes keep pace with business adoption.
Cybersecurity Fatigue and Skills Shortages Threaten Control Quality
The report highlights a rising trend, cybersecurity fatigue. Overwhelmed analysts, understaffed teams and escalating threats reduce the effectiveness of security operations, and therefore the reliability of ITGC execution.
Weaknesses include:
- Late or inconsistent access reviews.
- Slow patching cycles.
- Alert fatigue in SOC environments.
- Insufficient documentation quality.
- Oversight gaps due to staff churn or burnout.
For IT audit leaders, this demands stronger evaluation of resource sufficiency, role coverage and control sustainability. A “documented control” is meaningless if the team cannot execute it reliably year round.
Conclusion; The Call to Action
AuditBoard’s 2026 outlook is clear, IT audit functions must modernise.
AI governance, cloud complexity, third party risk and cybersecurity fatigue are not isolated risk topics, they form a combined pressure front that will define the next audit cycle.
Organisations that strengthen model governance, improve cloud assurance, enhance vendor risk oversight and address staffing sustainability will be better positioned to demonstrate audit readiness, reduce incident likelihood and maintain regulatory confidence.
For IT audit leaders, now is the time to uplift methodology, expand risk coverage and embed continuous assurance into the way technology governance is delivered.
