Internal and External Auditors
Table of contents
1. Introduction..................................................................................................................2 2. The role of internal and external auditors in corporate governance..............................2 3. Difficulties faced by auditors in contribution to corporate governance……………....4 4. Conclusion…………………………………………………………………………….6 5. References…………………………………………………………………………….7
1. Introduction
Corporate governance involves measuring, reporting, transparency, and monitoring, relevant and reliable information for decision-making. Therefore, numerous business journals and articles suggest that a board of directors, internal and external audit and management contribute as main tools to decent corporate governance. Number of authors discussed the contribution of external and internal auditors in the modern corporate governance. For example, Alabede (2012) stated: “The external auditor is highly regarded in the corporate governance framework because unlike the internal auditor, is appointed by the shareholders.” The internal audit plays an important role as it provides services to the other three components of corporate governance (DeZoort, 2002). The collaboration of internal and external audit, has received huge attention for the most part over the last decade due to the understanding that strong corporate governance systems help reduce the overwhelming impact of corporate fall down (Rusak and Johnson, 2007). If auditors will not perform their job well it can affect not only the company and its investors but in some cases the whole economy, therefore, when external auditors engage in audit processes, they automatically become legally responsible. The aim of this paper is to discuss these hazards and to recognize the role internal and external auditors play in achieving effective corporate governance.
2. The role of internal and external audit in corporate governance
In order to distinguish
1. Introduction..................................................................................................................2 2. The role of internal and external auditors in corporate governance..............................2 3. Difficulties faced by auditors in contribution to corporate governance……………....4 4. Conclusion…………………………………………………………………………….6 5. References…………………………………………………………………………….7
1. Introduction
Corporate governance involves measuring, reporting, transparency, and monitoring, relevant and reliable information for decision-making. Therefore, numerous business journals and articles suggest that a board of directors, internal and external audit and management contribute as main tools to decent corporate governance. Number of authors discussed the contribution of external and internal auditors in the modern corporate governance. For example, Alabede (2012) stated: “The external auditor is highly regarded in the corporate governance framework because unlike the internal auditor, is appointed by the shareholders.” The internal audit plays an important role as it provides services to the other three components of corporate governance (DeZoort, 2002). The collaboration of internal and external audit, has received huge attention for the most part over the last decade due to the understanding that strong corporate governance systems help reduce the overwhelming impact of corporate fall down (Rusak and Johnson, 2007). If auditors will not perform their job well it can affect not only the company and its investors but in some cases the whole economy, therefore, when external auditors engage in audit processes, they automatically become legally responsible. The aim of this paper is to discuss these hazards and to recognize the role internal and external auditors play in achieving effective corporate governance.
2. The role of internal and external audit in corporate governance
In order to distinguish
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