'The role of internal auditors in supply chain risk


During the last years supply chains have faced many challenges, including the corona pandemic, the war in Ukraine and a move to more sustainable business models. The Committee of Professional Practices conducted research on the role of internal auditors in supply chain risks. Overall this research shows a great diversity in how internal audit departments deal with supply chains risks.

Throughout the diverse range of companies and topics studied, few communalities were found. Despite that supply chain is identified as a top risk for organizations in 2023 by CAE's, 30% of respondents indicate not being involved with supply chain risks in any way. These 30% consists of IAFs of different sizesand different industries.
A surprising finding given the attention the topic of supply chain receives in this day and age. It might explain why the internal audit literature contains few research and guidance on the topic. IAF's that do work on supply chain take different approaches and scopes tailored to the organization, taking into account different topics. Often these include the topics identified in the literature study underlying this survey. Additionally a diverse range of other topics are taken into account, including security and outsourcing.
Another example of the diversity between IAFs found in this study. Future research could be performed on the diversity of subjects, and on providing a common analytical framework for operationalizing audits on supply chain management. 

Surprisingly, ESG related supply chain topics such as climate impact are not included by most IAFs. Only three IAFs indicate to include ESG topics in supply chain audits. With upcoming sustainability regulations (and broader societal developments) internal auditors have an opportunity to be a driver for ESG related supply chain topics in their organizations. A good chance to be a business partner preparing and navigating the organization through uncertain times!

On the 24th of January the IIA Professional Practice Day will focus on the IAF and supply chain risks. Are you responsible for professional practices in your audit function, and are you interested in joining the discussion?  Please register here or send an e-mail to trainingen@iia.nl.

Click here to read the results of the research

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