The Role of Internal Audit in Enhancing the Effectiveness of Internal Control over Sustainability Reporting (ICoSR) and Environmental, Social, and Governance (ESG) Compliance: A Case Study of an Aluminium Manufacturing Company

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Parhusip, Arrye Genap (2026) The Role of Internal Audit in Enhancing the Effectiveness of Internal Control over Sustainability Reporting (ICoSR) and Environmental, Social, and Governance (ESG) Compliance: A Case Study of an Aluminium Manufacturing Company. Masters thesis, IPMI Institute.

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Abstract

This study examines The Role of Internal Audit in Enhancing the Effectiveness of Internal Control over Sustainability Reporting (ICoSR) and Environmental, Social, and Governance (ESG) Compliance at PT Indonesia Asahan Aluminium (Persero) to support its Initial Public Offering (IPO) readiness for the fourth quarter of 2026. The study employs a qualitative method with a single embedded case study design, analyzing data that includes sustainability reports from 2024–2025, as well as results from interviews, document analysis, observations, and Focus Group Discussions (FGDs) with key informants. The findings indicate that while sustainability and ESG governance frameworks have been established, ICoSR implementation remains in the early stages, and the role of Internal Audit in providing assurance regarding sustainability reporting and ESG compliance is not yet optimal. Key challenges include divergent understandings of ESG, organizational silos, limited information integration, and the absence of formal ESG audit guidelines and assurance mechanisms. The study concludes that strengthening Internal Audit through enhanced ESG competencies, specialized audit programs, early involvement in the sustainability reporting process, and the implementation of a structured ICoSR framework requires strong commitment from top management ("Tone at the Top"). Such synergy is essential to enhance the reliability and credibility of sustainability and ESG information, bolster stakeholder confidence, and support the success of INALUM’s IPO in the fourth quarter of 2026.

Keywords: Internal Audit; ICoSR; ESG Compliance; Tone at the Top; IPO Readiness.

Item Type: Thesis (Masters)
Subjects: H Social Sciences > H Social Sciences (General)
Divisions: Thesis > Master of Business Administration
Depositing User: sandra margaretha
Date Deposited: 28 Sep 2026 02:31
Last Modified: 28 Sep 2026 02:31
URI: http://repository.ipmi.ac.id/id/eprint/3025

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