The purpose of this paper is to investigate the nature and extent of internal audit functions’ (IAFs) involvement in environmental, social and governance assurance (ESG) and consulting in Australia. To identify emerging priorities, and the profession’s capacity to respond to these, the paper also explores internal audit practitioners’ perceptions of the current and future importance of these issues and the adequacy of their skills and expertise in meeting the challenges associated with their involvement in these areas.
Data were collected from 100 Chief Audit Executives and internal audit service provider partners through a survey.
Governance issues are a key area of focus for respondents’ assurance and consulting efforts, followed by social and environmental issues, respectively. While governance issues are perceived to be of greatest current importance to IAFs, environmental issues are most commonly expected to increase in importance over the next five years, and are reported to be in greatest need of further development of IAFs’ skills and expertise.
As the corporate landscape and expectations around transparency and accountability increase, the internal audit profession needs to address the current perceived skills gap in their ability to provide assurance and consulting on ESG issues to ensure their continued relevance and ability to meet stakeholders’ needs and expectations in providing effective integrated assurance and in contributing to internal improvements.
This paper provides initial empirical evidence of the nature and extent of internal audit’s involvement in ESG assurance and consulting.
The authors would like to thank the IIA – Australia for their assistance and the survey participants for their time and contribution. They would also like to thank the anonymous referees for their constructive comments.
Soh, D.S.B. and Martinov-Bennie, N. (2015), "Internal auditors’ perceptions of their role in environmental, social and governance assurance and consulting", Managerial Auditing Journal, Vol. 30 No. 1, pp. 80-111. https://doi.org/10.1108/MAJ-08-2014-1075
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