The latest headline topic for internal auditors seems to be Environmental, Social, and Corporate Governance (ESG).
For background, I refer you to a sensible piece by Richard Chambers.
SEC Climate Disclosure Proposal May Be the Next SOX for Internal Audit summarizes in a clear and concise way (thank you, Richard) the SEC’s proposed climate-related disclosure requirements.
Rather than repeat the proposed requirements here, I refer you to Richard’s piece or, if you need, the SEC’s proposal.
Richard suggests three ways internal audit can assist:
- Make sure our leaders are aware of the rules and help them to formulate a response to the risk of non-compliance.
- Provide assurance on the planned disclosure process. In the same way that internal audit assesses and provides assurance on new technology projects, we can provide assurance on the new disclosure process.
- On a continuing basis, assess and provide assurance on related controls.
He closes his article with encouragement:
As assurance professionals, we must keep our eyes on the horizon to identify, monitor, and address critical compliance risks. As I mentioned, the proposed climate disclosure requirements present challenges and opportunities for internal auditors. Those who joined the profession after SOX was embedded into our compliance practice will…
