Auditing Essay Example | Topics and Well Written Essays - 2000 words - 1

Auditing - Essay Example he corporate managers have grossly increased to unprecedented levels where their decisions might have had a greater impact on the larger good of the stakeholders i.e. Shareholders, general public, government etc. In the heat of competition the managers of these organizations take decisions which may not be in favor of internal as well as external customers of these organizations. This has therefore necessitated the more proactive role of the board of the directors of organizations in promoting good governance specially their role in ensuring the effectiveness of the internal controls of the organization is stressed upon a lot. An effective internal audit function can play an important role in helping Board of directors to discharge their responsibility of ensuring effective control. However before discharging this responsibility, an internal audit function within the organization need to be objective and proactive in nature with a mandate to conduct independent reviews and with the n ecessary organizational flexibility to report their findings to the highest authority within the organization so that not only independence is maintained but also the results are communicated to the platform where they can be executed and explored without any internal compromises and with an aim of safeguarding the interests of the shareholders by adding value to their investments. Corporate governance has succeeded in attracting a good deal of public interest because of its apparent importance for the economic health of corporations and society in general. However, the concept of corporate governance is poorly defined because it potentially covers a large number of distinct economic phenomenon. As a result different people have come up with different definitions that basically reflect their special interest in the field. It is also believed that if the firm is nothing more than a legal fiction than its values must be driven by its stakeholders thus the companies values emerge as a