Internal Audit’s Role in Supporting Sustainability Reporting

Abstract

In today's corporate environment, sustainability reporting is becoming increasingly important for companies, as it allows them to disclose their environmental, social and governance (ESG) activities to stakeholders. Due to the growing emphasis on existing business practices and corporate governance, the demand for transparent and reliable sustainability reporting has increased significantly. In light of these changes, the role of internal audit in supporting sustainability reporting is important. The internal audit function plays a special role in providing companies with independent assurances and consulting services, ensuring the effectiveness of risk management, internal control and management processes. Since companies incorporate ESG goals into their strategies and activities, internal auditing is explicitly one of the guarantors of preparing reliable and complete sustainability reporting. By developing and/or using risk assessment, control assessment, and appropriate methodologies, internal audits can help companies improve the quality and accuracy of sustainability reporting. The present article outlines the role, importance and support of internal audit in preparing sustainability reporting. It examines the challenges and opportunities associated with the integration of ESG factors into internal audit practice, the evolution of the regulatory environment governing sustainability reporting, and strategies to improve the effectiveness of internal audit in this context. The purpose of this article is, based on a comprehensive review of the literature and analysis of best practices, to provide a vision of how internal audit can improve sustainability reporting and contribute to the continuous and stable development of the company.