Tammikuu 1/2023 – The Future Role of the Internal Audit Function: Assure. Build. Consult

Abstract
Chambers (2022) recently raised “a red flag” by pointing out that internal auditors have been unduly placing Environmental, Social, and Governance (ESG) risks on the back burner. Internal auditors currently do not play a significant role as assurance providers and are absent from potential advisory services about ESG – on both sides of the Atlantic. We diagnose an “ESG helplessness syndrome.” Like in the world of animals, the internal audit function is in a state of freeze response when it comes to ESG topics. The ESG challenge is so big, and the threats for the role of the Internal Audit Function (IAF) are so real, that the profession reacts like animals in the face of a threat: they freeze. We discuss and challenge the professional demand for “objectivity” and “independence” in the ESG context as they might represent obstacles to the IAF playing a significant role in the ESG agenda. We suggest practitioners consider widening the repertoire of internal auditing. We suggest an ABC-Model © of Internal Auditing, adding “Building” as a new third pillar of internal audit value creation which complements the traditional assurance and consulting services. We encourage internal auditors to become “builders” when tackling the ESG challenge in their respective organizations. Metaphorically speaking, we borrow from Yvon Chouinard, the founder of Patagonia which is often used as an ESG role model company when we suggest “Let Internal Auditors Go Surfing” as our call to action.