Role of Internal Auditor

2921 Words12 Pages
Internal audit’s role in modern corporate governance
Thought leadership series

Risk and Advisory Services

Internal audit’s role in modern corporate governance

Recent events have highlighted the critical role of boards of directors in promoting good corporate governance. In particular, boards are being charged with ultimate responsibility for the effectiveness of their organisations’ internal control systems. An effective internal audit function plays a key role in assisting the board to discharge its governance responsibilities. Yet how does the board – and its audit committee – satisfy itself that internal audit is functioning effectively and efficiently?

The board’s responsibility for internal controls
Through working with a broad
…show more content…
3 Before deciding the reporting lines for internal audit, it is critical to consider the fundamental distinction between the respective roles of the board (oversight) and management (decision making and the execution of those decisions). Key activities which fall within the definition of effective oversight include listening, asking questions, assessing and challenging answers. In many respects this is exactly what an effective internal audit function does.

1 Smith, Sir Robert; “Audit Committees Combined Code Guidance”, January 2003. 2 ASX Corporate Governance Council; “Principles of Good Corporate Governance and
Get Access