engleski

Synergy of Audit Function: An Ideal Interaction for Effective Corporate Governance

The global financial crisis actualized the issue of control mechanisms of corporate governance and credibility of financial reporting. In fact, the crisis was an opportunity to improve the quality of corporate governance, establish the role of management, supervisory boards and other stakeholders. As part of the reform of corporate governance, the audit and related control mechanisms have got new tasks, and their role from advisory has grown into the role of creating an added value to corporate governance. Therefore, many countries have acceded to the modification of the regulatory framework in order to strengthen the position of the audit. National and international regulations issue the performance of the audit function through three forms: audit committee, internal and external audit. The audit committee has developed as a sub-committee of the supervisory board whose members have the necessary financial expertise. This committee has a dual role: an extended arm of the supervisory board and complementary mechanism of external audit. Internal audit today is actively involved in the process of corporate governance and one of its main tasks is advising management related to operational risks, removing of irregularities and efficient use of resources. The quality of the external audit is an important factor of corporate governance quality. Its role is crucial for credibility of financial reporting which is interested for all stakeholders. This paper analyses the role of the audit in monitoring and control of the enterprise. The question is how these mechanisms can be effective and which ideal interaction of them improves the quality of corporate governance.

audit committee, external audit, internal audit, corporate governance, synergy

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