Internal And Internal Control Systems Essay

764 Words Oct 22nd, 2016 4 Pages
Serving the needs of all the stakeholders with the help of effective internal control systems, policies and procedures lay the foundation of excellent corporate governance. Corporate governance concentrates on management as well as on shareholder’s wellbeing . Internal as well as external corporate governance helps organization in board culture, their share price in market, future need for raising capital and the most important is to gain shareholders trust.

The internal and external check upon the company’s management is maintain by the help of the process of audit and the role of auditors has to be a very concrete one in order to do the process and it goes without any saying that auditors should be independent and impartial. The annual audit is one of the pillars of corporate governance. Given the separation of ownership from management, the directors are required to report on their stewardship through of the annual report and financial statements sent to the shareholders. By being the means of check and balances the requirement of auditors becomes all the more important. Hence what has to be looked into is their efficiency and effectiveness

The role of auditors with respect to corporate governance has not been clearly defined anywhere but one could infer that the auditors must act on accordance with professional ethics and independently report the current position of the company accurately and exactly.

Problem arises when there is the lack of understanding of the…

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