Role of Internal Audit in Strengthening Corporate Governance

The Role of Internal Audit in Strengthening Corporate GovernanceIIA ConferenceAbu Dhabi 13 April 2010What is Internal Audit?• Definition of Institute of Internal Auditors:– Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations.– It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governanceprocesses.The Evolving role of Internal Audit• Initially, internal auditors were focusing on compliance of operations with the set policies and procedures.• Then, the scope increased to cover the internal control environment.• Then, internal auditors started assessing the risk within organizations (COSO ERM framework).• Now, many stock markets require that public listed companies have internal auditing function within their organizations.• Internal Audit’s role is expected to widen and cover CG within their entitiesCorporate Governance• Definition of CG by OECD:– Corporate governance involves a set of relationship between a company’s management, its board, its shareholders and other stakeholders. Corporate governance also provides the structure through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined.Corporate Governance Components1. Board of Directors & ...