Bridging Risk, ESG, and Digitalization: A Literature Review on Internal Audit’s Strategic Role in Corporate Governance

Abstract

This study aims to explore the evolving role of the Internal Audit Activity (IAA) in enhancing corporate governance, particularly in the context of ESG disclosure, digital transformation, and risk-based audit practices. Growing global corporate scandals and digital complexities have positioned internal audit as a key mechanism for governance, fraud prevention, and financial transparency. However, there remains a lack of standardized professional guidance on integrating corporate governance elements into audit strategies. A systematic literature review was conducted, analyzing empirical and conceptual studies from 2002 to 2025, focusing on audit quality, ESG influence, audit committee input, and enterprise risk management. The review draws from 15+ sources across global contexts using regression models, content analysis, and qualitative interviews. Findings confirm that IAA effectiveness improves with risk-based planning, audit committee involvement, and quality assurance programs. It is recommended to enhance auditor training in ESG and digital tools and develop frameworks for aligning audit practice with governance components.