Internal audit functions and environmental, social and governance (ESG): a systematic literature review

Hien Vo Van, Malik Abu Afifa and Duong Bui Van

Asian Review of Accounting, 2025, vol. 34, issue 1, 75-107

Abstract: PurposeSustainable development always highly appreciates the role of internal audit (IA) in environmental, social and governance (ESG). This study explores research lines on the relationship between IA functions and ESG, thereby opening up further research trends.Design/methodology/approachAccessing systematic literature review through the dataset from Scopus source, 34 articles were included in the analysis after complying with PRISMA screening principles. The data analysis process is supported by the VOSviewer tool.FindingsWe clarify the effects of IA on ESG (positive, negative, or insignificant) using the theory and context of prior studies, as well as provide difficulties for future research. In addition, this paper discusses limits and future research ideas. The findings indicate a favorable link between IA functions and ESG. IA functions are actively involved in ESG concerns, ranging from ESG practices and performance to ESG disclosure. Furthermore, there is a link between IA functions and ESG disclosure that improves organizational effectiveness (for example, firm value). As a result, these perspectives offer substantial support for business managers, keeping employees, and future scholars in this context.Research limitations/implicationsThe perspectives of this study emphasize the positive role of IA functions and their sensitivity to sustainable performance by stressing ESG practices, performance, and reporting in businesses, hence boosting the firm’s value and competitive position. As a result, business managers can make decisions to increase IA functions (for example, supporting the usage of recently integrated digital systems or tools) as a method of achieving long-term growth by improving performance and disclosing ESG practices. Furthermore, these ideas are advantageous to policymakers since they promote the establishment of rules and procedures for IA functions in businesses, hence increasing the levels of sustainable development that they seek to achieve. This study also provides prospective research subjects that might be pursued by assessing the issues experienced in previous research projects.Originality/valueThis study provides a comprehensive and reliable view of research lines on the relationship between IA functions and ESG using a systematic literature review method.

Keywords: Audit committee; Internal audit; Corporate social responsibility; Sustainability reporting; Environmental social and governance (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eme:arapps:ara-07-2024-0241

DOI: 10.1108/ARA-07-2024-0241

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