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CS Professional · Internal and Forensic Audit · Emerging Issues and Challenges

Greenfield Textiles Ltd, an Indian listed company, asks its internal audit team to review the reliability of the sustainability data (energy use, water consumption, waste) that feeds into its annual BRSR. Which activity best describes the primary internal audit contribution here?

Internal audit should evaluate the controls over collecting, consolidating and reporting sustainability data and report its findings to management and the audit committee. It should not prepare the report or set ESG targets, since that would compromise its independence and objectivity.

  1. APreparing the BRSR itself on behalf of management
  2. BEvaluating the controls over collection, aggregation and reporting of the sustainability data and giving assurance to management and the audit committeeCorrect
  3. CDeciding which ESG targets the company should adopt
  4. DIssuing the statutory assurance opinion required for the BRSR Core by the stock exchange

Explanation

Internal audit provides independent assurance on the processes and controls that generate non-financial data. Preparing the report or setting targets is a management function and would impair independence. Statutory or external assurance on BRSR Core is given by an independent assurance provider, not through internal audit's advisory role.

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