Auditors' Concern on Business Risks

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1.0 Introduction

Corporate governance generally refers to processes by which the organizations are directed, controlled and held to account and is underpinned by principles of openness, integrity and accountability.[1]
It involves a set of relationship between a company’s management, its board, its shareholders and other stakeholders and provides the structure through which the objectives of the company are set and the means of attaining those objectives and monitoring performance are determined.
It can also be described as the process by which organization are directed and controlled. [2]
Governance is described as the role of persons entrusted with the supervision, control and direction of an entity. Those charged with governance
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Senior management wants internal audit to compensate for the loss of control they experience resulting from increased organizational complexity. Senior management expects internal audit to fulfill a supporting role in the monitoring and improvement of risk management and internal control, and wants them to monitor the corporate culture. Furthermore, they expect internal audit to be a training ground for future managers. On the other hand, internal audit expects senior management to take the first steps in the formalization of the risk management system. They are looking for senior management support, as this benefits their overall acceptance.
3.2 Auditee and external auditor
The relationship between auditee and external auditor exist when the audit engagement start. Their relationship therefore determined by the engagement letter between them. according to ISA 210[6] before accepting an engagement the auditor must establish whether the precondition for an audit are presented and there is a common understanding between the auditors and management and where appropriate those changed with

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