Abstract
The origins of auditing can be traced back to Greek, Egyptian and earlier civilizations. Audits were associated with detection of fraud. The audit business began to grow with the emergence of large-scale businesses. Despite making a huge investment in propaganda, the auditing industry has been unable to detect massive frauds or even have been part of the problem. The industry opposes all reforms and leads a strong lobbying in Washington, DC, London, and Brussels. The audit function is salient not only to investors or the public trust, but to society as a whole. One of the fundamental tenets of current corporate governance around the world is the importance of external financial audit.3The function of the audit is to ensure that an organization’s results and related disclosures are fairly presented.4 While conducting an internal audit activity, the auditor is required to assess and make appropriate recommendations for improving the governance process in its accomplishment of the following objectives: (i) promoting appropriate ethics and values within the organization, (ii) ensuring effective organizational performance management and accountability, (iii) communicating risk and control information to appropriate areas of the organization, and (iv) coordinating the activities of and communicating information to the board, external and internal auditors, and management.5
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Notes
OECD, Principles on Corporate Governance, 2004.
Masood Fooladi & Maryam Farhadi, Corporate Governance and Audit Process(International Conference on Humanities, Society and Culture, IACSIT Press, Singapore, 2011.
Richard Anderson & Associates (2008): Risk Management and Corporate Governance, OECD, p. 20.
Neininger, Roger, ‘The Future of Audit: Where to next?’, KPMG, 2012, p. 5.
The Institute of Internal Auditors, October 2010, p. 11.
Note 5: Standards and Guidance.
R. Kathy Hurtt, ‘Development of a Scale to Measure Professional Skepticism’, AUDITING: A Journal of Practice and Theory, 29, No 1, 2010: 149–171.
Note 5, International Standards for the Professional Practice of Internal Auditing (Standards).
Idem.
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© 2014 Felix I. Lessambo
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Lessambo, F.I. (2014). Internal Audit Process. In: The International Corporate Governance System. Global Financial Markets series. Palgrave Macmillan, London. https://doi.org/10.1057/9781137360014_13
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DOI: https://doi.org/10.1057/9781137360014_13
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