In: Accounting
(Auditing Principles & Procedures)
Define corporate governance, the board of directors, and the audit committee and explain how they relate to each other.
Corporate governance: In simple terms, it is the set of rules & regulations laid down to run the business in a well directed & controlled manner
Board of directors: Board of directors are set of people who are entrusted with the responsibility to ensuring the prosperity of the company by meeting all stake holders interests
Audit Committee: Audit committee is one of the wings of the board of directors who are entrusted with overseeing financial reporting & disclosure
A relation among above three:
1. Audit committee is formed from the members of the board of auditors i.e audit committee is a tool of a board of director's to oversee the financial reporting & disclosure
2. Audit committee & Corporate Governance: Corporate governance includes preparation & disclosure of financial information as per regulatory authorities requirements and audit committee ensures that
3. Corporate governance & Board of directors: Board of directors are the responsible to prepare,Implement & oversee the various policies across the organisation