Corporate Governance And The Auditor And Corporate Governance

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Abstract

This article defines the meaning of the corporate governance, its importance in the current scenario and also its benefits. As per the paper, Corporate Governance may be defined as
“Corporate governance loosely refers to the whole system of rights, processes and controls established internally and externally over the management of a business entity with the objective of protecting the interests of its stakeholders.”
After this, the article focuses on the relationship between the auditor and the corporate governance. It discusses the important role played by the auditor in a good corporate governance system. This article also focuses on the role of auditing committee in corporate governance and securing interest of shareholders and …show more content…

The article discusses the role and objective of auditor in corporate governance. It discusses and analysis the composition of the audit committee and also includes the recommonation of various committes. It also talks about the audit committee, its relation with the auditor and corporate governance. Moreover, before concluding the artcile the author discusses the “Governance in today’s Parlance” in which the author analysis the current parlance of the corporate governance in regards to legality and other compliance. The author has discussed the data of 2002 of the percentage of the companies having audit committee and also the number of independent directors required in a audit …show more content…

It demands the requirement of better rules and regulation. But even with all such rules and regulations being sanctioned, the chief work is still of the auditors of the company. They are the ones who should audit the financial thoroughly and ensure the shareholders and the other investors about the secureness of their investment and also to increment their confidence.

The shareholders of the company place very high trust on the auditor’s report, which shows the true and fair view of the accounts of the company. Hence the auditor should perform their duties with due diligence and vigilance to assure the stakeholders about the truth and fairness of the financial statements. It also helps in reducing the chances of fraud and improper accounting.

However, to achieve proper safeguarding and corporate governance, an independent auditor is required. Such auditor should not be related to the company or is directors in any way. He should not be a shareholder or be in debt of the company. Moreover such a auditor should fulfill all the criteria for appointing an auditor as per the Companies Act,

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