Question

How does internal audit contribute to good corporate governance?

Answer 1

Corporate governance may be defined as oversight of a corporation's policies, procedures and practices. This oversight helps to ensure that the business is operated in the best interests of the corporation and its shareholders. The process of managing corporate governance is usually handled by a board of directors. The corporation may employ a staff of auditors to test and monitor internal controls.

Following Reason a internal audit Contribute a good corporate governance.

1.  Internal auditors are charged with ensuring that corporate processes and associated controls are functioning as intended

2.  Ensuring that resources of the corporation are used effectively is a major role of internal auditors.

3.One of the most important tasks of the internal auditor is the detection of fraud.

4.Different types of internal audits can be performed throughout the year. They may focus on financial controls, operating controls or and information technology controls. A board of directors may decide to test in all of these areas, or it may focus on only one.

5.The internal audit function in most corporations is a year-round process conducted by employees. Typically, an audit manager drafts an annual audit plan, and the board of directors approves the plan. Most corporate audits are focused and scheduled according the level of risk. Higher-level risk areas often receive the most attention from the internal audit function in order to ensure that corporate governance objectives are being met.