Implementation of Risk-Based Audit to Evaluate the Effectiveness of Corporate Sustainability Programs: Indonesian Manufacturing Case

Abstract

Companies' commitment to corporate sustainability is increasing, but the effectiveness of their program implementation needs to be evaluated objectively. This study aims to analyze how risk-based auditing can be applied to evaluate the effectiveness of corporate sustainability programs in manufacturing companies in Indonesia. The method used is a literature study with a qualitative approach. Data were obtained from an analysis of scientific journals, books, company annual reports, and relevant international auditing standards such as ISO 14000, ISO 26000, and COSO ERM. The results show that risk-based auditing provides a systematic framework for identifying, assessing, and prioritizing sustainability risks—environmental, social, and governance (ESG)—that can hinder the achievement of sustainability goals. Its application allows auditors to focus on high-risk areas, resulting in more efficient and in-depth evaluations. An implicit case study of an Indonesian manufacturing company reveals that integrating ESG principles into the traditional risk audit process can uncover gaps between declarative commitments and operational implementation. The conclusion of this study is that risk-based auditing is an effective and powerful tool for evaluating and improving the quality of corporate sustainability programs . The implication is that manufacturing companies are encouraged to adopt this approach to ensure that their sustainability investments are not merely cosmetic, but have a real and sustainable impact.