Voice of the CEO: The New Administration’s Impact on Risk and Compliance
Blogs Anthony Pugliese, CIA, CPA, CGMA, CITP Feb 27, 2025
With the ushering in of a new administration in Washington, I’ve received many questions about how the next four years will affect the risk landscape and the U.S. internal audit and compliance profession.
From artificial intelligence (AI) and tariff policies to wider-scale deregulation, there is much to consider. The IIA’s advocacy team continues to maintain a close and open dialogue with Washington policymakers to ensure the profession’s voice is heard. Their expertise helps us provide timely, relevant guidance on evolving regulatory and political changes.
Regulating Artificial Intelligence
A key policy area that is on our radar, and one that should be top of mind for organizations in the U.S., is how the new administration’s approach to AI and emerging technology will impact the risk landscape and internal audit profession.
On Jan. 23, President Donald Trump issued an executive order on AI entitled, “Removing Barriers to American Leadership in Artificial Intelligence.” This executive order directs the assistant to the president for science and technology to develop an “Artificial Intelligence Action Plan” within 180 days. The goal of this plan is to create a policy that enables the U.S. to maintain global AI dominance.
Executive orders are official documents through which the president of the United States manages the operations of the federal government.
The president’s AI policy objectives were described in greater detail by Vice President JD Vance at the recent AI Action Summit in Paris. The vice president said, in relevant part, “We believe that excessive regulation of the AI sector could kill a transformative industry just as it’s taking off, and we’ll make every effort to encourage pro-growth AI policies.”
These actions suggest that the new administration intends to take a different approach to governing the use of AI in the U.S. As the AI policy landscape matures, compliance and internal audit practitioners must prioritize establishing internal processes and controls to closely monitor regulatory changes. Keeping a close pulse on how policy develops is key to ensuring that the organizations we serve remain compliant in their own AI use. In addition, it strengthens practitioners’ ability to accurately and proactively assess potential AI-related risks.
We continue to monitor the president’s executive orders and other policy-related developments to ascertain any potential impact on the internal audit profession.
Tariff Policy and Supply Chain Disruption
Tariff policy is another topic that continues to garner significant attention. While there is still a high level of uncertainty as to how changes in policy will play out, the potential impact it will have on business operations should be top of mind, particularly for organizations that rely heavily on international supply chains.
Tariff policy changes can introduce several risks to an organization, including the potential for increased production costs, the need to diversify suppliers or consider reshoring supply where possible, and changes in consumer demand that may impact an organization’s revenue.
Internal audit practitioners must ensure there are processes in place to monitor and assess the potential impact that tariff policy will have on the organization’s supply chain relations and business operations. Beyond evaluating potential contingency plans and alternative sourcing strategies, practitioners must also prioritize supplier due diligence within third-party risk management systems in the event that the organization must adapt to new or alternative suppliers to keep pace with policy changes.
The IIA’s forthcoming Third-Party Topical Requirement will provide critical guidance to practitioners as their organizations establish new supply chain relationships.
The Potential Impact of Deregulation
Perhaps one of most dominant themes in the new administration as it relates to the internal audit and compliance sector is the potential for wide-scale deregulation over the next several years.
In an era with fewer regulations, internal audit practitioners must lean into self-regulation practices to manage potential risks as best as possible. The potential for deregulation also presents an important opportunity for practitioners to enhance their strategic advisory role. With less demand for compliance-focused audit work, practitioners should demonstrate internal audit’s value beyond assurance services and lean further into strategic advice and counsel for boards and management.
Deregulation will remain a prominent theme in the coming years, and The IIA is committed to advocating for practitioners and governance bodies.
The Importance of Advocacy Work
Each change in administration brings forth new opportunities, risks, and a degree of uncertainty. The role of internal audit is to work alongside boards, management, and other key stakeholders to navigate policy and economic changes while upholding accountability and governance, even with minimal regulatory oversight.
The IIA will remain a key resource for boards and audit practitioners as they navigate these changes and will continue to work alongside U.S. policymakers of both parties to advance laws and regulations recognizing the importance of internal audit.
In this new political environment, we are proud of the bipartisan relationships we have forged with U.S. lawmakers, as well as our advocacy team’s diligent efforts to advance and protect internal audit interests.