Sustainability-related co-operation among audit committees, internal auditors and external auditors: a survey-based study

Purpose This paper aims to examine the impact of European sustainability regulations on the degree of co-operation among audit committees, internal auditors and external auditors. Design/methodology/approach This study is based on online questionnaires completed by 112 German audit committee members, internal auditors and external auditors, adopting a research approach with qualitative components. Findings This study reveals that although the three authorities have strengths within financial and industry expertise and possess a solid base of financial, personnel and technical resources, they have deficiencies in dealing with social and, notably, environmental issues such as water and marine resources as well as biodiversity and ecosystems. However, increased sustainability-related communication and opportunities for collaboration could positively impact sustainability oversight. The parties could mutually alleviate their workloads by involving environmental experts or by conducting aligned audits of sustainability-related internal control and risk management systems performed by internal and external auditors under the strategic oversight of the audit committee. Despite potential benefits, parties tend to overestimate their own capabilities and seek assistance from one another for environmental issues, hindering effective co-operation and fostering resentment. Originality/value This research contributes by stressing the need to consider environmental capabilities in the work and profiles of all three parties. It also highlights the importance of audits of sustainability-related internal control and risk management systems co-ordinated by the audit committee and performed by internal and external auditors.