Internal Audit Practices and Corporate Governance

Internal audit practices form a cornerstone of effective corporate governance by providing independent assurance that organisational risks are identified and managed, controls are functioning as intended and objectives are achieved. Originating from financial oversight, the internal audit function has evolved into a multifaceted discipline encompassing risk management, compliance, performance improvement and strategic advisory roles. Modern internal audit emphasises a risk-based approach, leveraging data analytics and continuous monitoring to detect anomalies and emerging threats. It operates under established frameworks and standards, collaborating closely with boards and audit committees to reinforce accountability, ethical conduct and stakeholder confidence. In an era of globalisation, digital transformation and heightened regulatory scrutiny, internal auditors play a pivotal role in aligning governance practices with environmental, social and governance (ESG) imperatives, cybersecurity resilience and sustainability objectives. By embedding internal controls within business processes, internal audit not only safeguards assets and reputations but also contributes to long-term value creation.

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Internal Audit Practices and Corporate Governance publication trend

The graph below shows the total number of articles in internal audit practices and corporate governance across all publications each year (not limited to Nature Index journals).

Technical terms

Corporate governance: System of rules, practices and processes by which a company is directed and controlled.

Internal audit: Independent assurance and consulting activity designed to add value and improve organisational operations.

Audit committee: Board subcommittee responsible for overseeing financial reporting, internal controls and audit activities.

Environmental, social and governance (ESG): Criteria assessing corporate performance on sustainability and ethical impact.

Internal control system: Processes implemented to provide reasonable assurance regarding the achievement of objectives.

Sustainability audit: Evaluation of an organisation’s environmental and social performance against predefined standards.

References

1. A need for assurance: Do internal control systems integrate environmental, social, and governance factors?. Corporate Social Responsibility and Environmental Management (2022).
2. Internal audit functions and sustainability audits: Insights from manufacturing firms. Cogent Business & Management (2023).
3. Factors affecting the voluntary use of internal audit: evidence from the UK. Managerial Auditing Journal (2018).