The Relationship Between Internal Control Practice And Corporate Governance

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1. Introduction This report will describe the relationship between internal control practice and corporate governance, also the interaction of Corporate governance and internal control practice and its causes that can be improving the development of the company. Also evaluate the company which is WOODSIDE PETROLEUM LTD, to evaluate this company’s corporate governance statement communicates information about its governance and internal control practices. However, it also will examine two principles from ASX Corporate Governance, to weigh the pros and cons of the company. 2. corporate governance and internal control With the development of economic globalization and the change of economic environment, competitive pressures and…show more content…
And there are five components of internal control, which are the control environment, risk assessment, control activities, information and communication, and monitoring. (Wilkins & Haun, 2013) A good internal control is an important guarantee of perfecting corporate governance. Also the internal control is not a serial process but a dynamic and integrated process, the framework applies to all entities: large, mid-size, small, for-profit and not-for-profit, and government bodies. However, each organization may choose to implement internal control differently. (COSO, 2013) 3. ASX Corporate Governance Principles Good corporate governance encourages shareholder confidence, which is important to the ability of individuals listed on the ASX to compete for capital. Below governance practices a listed entity chooses to adopt is basically a matter for its board of directors, the body charged with the lawful responsibility for handling its business with due care and assiduousness and therefore for ensuring that it has suitable governance preparations in place. (ASX, 2014) 3.1 Act ethically and responsibly This principle is related to the control environment of the internal control. Senior management and owners need to exhibit and practice the organization’s values because they are the role models for employees. (Wilkins&Haun, 2013) Acting ethically and responsibly goes well beyond mere acquiescence with
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