Internal Audit in Projects under the Influence of ESG Aspects with a Focus on Sustainability Reporting

Master's Thesis , 2024 , 68 Pages , Grade: 1,3

Business economics - Banking, Stock Exchanges, Insurance, Accounting

What is the influence of ESG under the focus on sustainability reporting on internal auditing, and how can this be integrated into the auditing of projects? The research question is based on the underlying: hypothesis ESG risks are currently not or inadequately integrated into current project audits. As a result, possible potentials are not leveraged. To prove this hypothesis, the following questions need to be addressed: Are ESG risks related to sustainability reporting reflected in current audit programs? How can ESG criteria being integrated into internal project audits? What conclusion can be drawn for the auditors to support sustainability reporting?

Projects are often exposed to a wide variety of risks. One reason is, that projects are subject to a dynamic environment due to their complexity and project durations. Particularly in the initial project phase, it is often difficult to comprehensively specify projects in terms of their outcome, scope, time, and resources. A high level of complexity often leads to change requests and thus to a modified scope as the project progresses. This is also shown by the "Pulse of the Profession" study, conducted for the tenth time by the Project Management Institute, according to which 52 per cent of projects completed in the last 12 months were affected by changes in the design and scope. Such adaptions usually impact the other factors of the Magic Triangle (longer project duration, higher project costs, or higher resource requirements). They subsequently often impact stakeholder satisfaction with the project and its result or even result in a project failure. Not least because of this context, the Agile Manifest was developed in 2002 to tackle such uncertainties. Today, many companies use agile project management methods or hybrid forms of agile and classic project management when the project can’t be sufficiently determined. Whether projects are handled classically, agilely or in a hybrid form, they represent an uncertainty and associated risk factor for companies. This is already reflected in the term "project" definition, which, according to, is characterised by keywords such as novel, complex, dynamic and significant, especially concerning economic success. Therefore, it is the question of how project success and the effectiveness and efficiency of managing projects can be monitored and ensured.

Inhaltsverzeichnis (Table of Contents)

• Abstract
• Table of Contents
• Index of Abbreviation
• List of Tables
• List of Figures
• 1 Introduction
• 1.1 Background and Problem Description
• 1.2 State of Research
• 1.3 Research Gap and Research Question
• 1.4 Objective and Limitation
• 1.5 Research Method
• 2 Project Management Standards
• 3 Internal Audit
• 3.1 Terminology and Delimitation
• 3.2 Internal Audit Characteristics
• 4 Project Audit
• 4.1 Definition and Characteristics of project auditing
• 4.2 Project Audit of conventional projects
• 4.3 Project Revision of Agile Projects
• 5 Sustainability Aspects in Internal Project Audit
• 5.1 Background - ESG Development
• 5.2 Sustainability Reporting
• 5.2.1 EU Taxonomy
• 5.2.2 CSRD Reporting
• 5.2.3 ESRS - European Sustainability Reporting Standards
• 5.3 ESG in Internal Audit
• 5.4 ESG Implications for Project Audits
• 6 Empirical investigations
• 6.1 Case Study
• 6.1.1 Case Study – Object (Single Case)
• 6.1.2 The Company – test object
• 6.1.3 Corporate Audit
• 6.2 Data collection and Analysis
• 6.3 Summary
• 7 New approaches in internal auditing
• 7.1 General implications for internal auditing
• 7.2 Implications for project audits
• Conclusion
• References

Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)

This research aims to provide transparency on the inclusion of ESG aspects in internal project audits and identify existing deficits within current audit approaches. The research seeks to highlight the need for adjustments to existing audit practices in response to new regulations and sustainability reporting standards.

• The importance of sustainability reporting in project management and internal auditing.
• The impact of ESG principles on project audits.
• The challenges and opportunities presented by the evolving landscape of sustainability reporting.
• The identification and analysis of existing deficits in current audit approaches related to ESG.
• The development of recommendations for integrating ESG considerations into internal project audits.

Zusammenfassung der Kapitel (Chapter Summaries)

• Chapter 1: Introduction provides a comprehensive overview of the research topic, including the background, problem description, and research question. It delves into the state of research on internal auditing and ESG in projects, highlighting the existing research gap that this study seeks to address. The chapter also outlines the research objectives, limitations, and methodology employed in this study.
• Chapter 2: Project Management Standards examines the established framework for project management and its relevance to internal auditing. It provides a foundation for understanding the principles, methodologies, and best practices employed in project management.
• Chapter 3: Internal Audit defines and clarifies the terminology and delimitation of internal auditing. It explores the characteristics, methodologies, and principles of internal auditing within the context of project management.
• Chapter 4: Project Audit defines and characterizes project auditing, highlighting the differences and similarities between conventional and agile project audits. The chapter explores the specific challenges and opportunities presented by project auditing in different project environments.
• Chapter 5: Sustainability Aspects in Internal Project Audit delves into the evolving landscape of ESG development and its impact on sustainability reporting. The chapter examines key sustainability reporting frameworks and standards, including the EU Taxonomy, CSRD Reporting, and ESRS. It explores the implications of ESG considerations for internal project audits, highlighting the need for integrating these factors into existing audit practices.
• Chapter 6: Empirical investigations presents the results of a case study conducted to explore the practical implementation of ESG aspects in internal project audits. The chapter details the data collection and analysis methods used in the case study and provides a summary of the findings.
• Chapter 7: New approaches in internal auditing discusses the general implications of ESG considerations for internal auditing, highlighting the need for adjustments to existing audit practices. The chapter specifically explores the implications of ESG for project audits, providing recommendations for incorporating sustainability aspects into audit methodologies.

Schlüsselwörter (Keywords)

This research focuses on the intersection of internal audit, project management, and sustainability reporting, specifically exploring the integration of ESG considerations into internal project audits. Key terms and concepts include internal auditing, project audit, sustainability reporting, ESG, CSRD, ESRS, EU Taxonomy, and risk assessment. The study examines the challenges and opportunities presented by the evolving landscape of sustainability reporting and the need for a more comprehensive and risk-oriented approach to internal project audits in the context of ESG.

• College: University of Western Sydney (Engineering and Design)
• Grade: 1,3
• Author: Martin Henschelchen (Author)
• Publication Year: 2024
• Pages: 68
• Catalog Number: V1464295
• ISBN (PDF): 9783389010686
• ISBN (Book): 9783389010693
• Language: English
• Tags: Internal Audit, Revision, ESG, Sustainability, Reporting, Taxonomie, Nachhaltigkeit, Projekte