Internal audit's role in the integrated reporting process in Durban.

Abstract

The progress of Integrated Reporting brings about an opportunity for Internal Audit to fill the role of the assurance provider on the information included in the Integrated Report. Providing assurance on the Integrated Report gives the stakeholders of the organisation more confidence in the reported information and allows for accurate decision making. The Integrated Report is made up of various capitals that consist of financial and non-financial information. Due to non-financial information becoming more significant to the stakeholder, it becomes crucial that this information is verified by an independent assurance provider. It is important to identify the ideal assurance provider who possesses the necessary competence and the required independence to verify that the information is accurate, valid and complete. This creates opportunities for many ideas and opinions on who the assurance provider should be and who is best suited for this role. The study investigates whether or not a role for Internal Audit exists in the Integrated Reporting Process and what that role is. Through in-depth interviews with the Heads of Internal Audit at four JSE-listed organisations in Durban, the role of the Internal Audit Departments was compared and analysed. The outcomes of the case studies were then compared to available literature. The research is motivated by the desire to add value to the Internal Audit profession and to allow the profession to grow. By identifying the current and future role of the Internal Audit Department in the Integrated Reporting Process, the results can assist companies to prepare for the emerging role and obtain the necessary resources to provide the required assurance. The findings of this research identified whether or not the Internal Audit Department is currently involved in the Integrated Reporting Process, and identify what the role of the department is. Furthermore, any differences between the Internal Audit Departments within the four organisations were examined. Finally the opinions of the Heads of lnternal Audit were compared to determine the future role of Internal Audit in Integrated Reporting.