Question

Describe corporate governance in auditing

Answer 1

Corporate governance involves balancing the interests of a company’s stakeholders which includes shareholders, management, customers, suppliers, financiers, government and the community.

One of the many important roles of a professional Auditing in corporate governance is to protect the interests of shareholder and stakeholders of a company. It is made possible by conducting independent reports by the auditors and not being influenced by the company.External auditors are required to state the finances of the company and attest to the validity of financial reports that may have been released. It is their job to ensure that the board receives accurate and reliable information

By developing efficient crisis management plans to be used in the event of corruption or fraud, an auditor helps in ensuring good corporate governance.Controls measures that are to be used with the media and law-enforcement officials are part of the crisis management plans.

Auditors help in promoting corporate governance by conducting a period risk assessment. External auditors reassess the security measures that a company has in place against corruption or corporate fraud.Additionally, they also analyse the on the whole risk tolerance of the company and the efforts that the company has made towards lessening the risks.

All in all, the role of an audit committee and auditors has become very crucial in the current scenario. Stakeholders expect loyalty and trust from auditor while resolving financial facts and exposing the fault in an organisation.