The-Accountant-Sep-Oct-2017-Final

Governance
law.
From this, we
are able to note that
internal auditing and
corporate governance
are inseparable given the
current public outcry on
management of various
government and private
units on the ongoing
scandals including the fall
of various supermarkets
in Kenya to mention
but a few. Based on
assumption that boards
are charged with the
ultimate responsibility
for their effectiveness on
internal control systems,
the same systems have
indeed highlighted the
critical role of internal
audit unit in ensuring
adequate oversight of
internal controls and the
effectiveness of internal
controls. It’s upon the
head of internal audit
unit to ensure that he
works with the board and executive
management team, as appropriate to
determine how best governance can be
defined for internal audit purposes and
the extent and expectations of internal
audit assurance and consultancy needed
to satisfy the internal audit charter which
at the end shall spell out the work of
internal audit to include governance
activities and processes.
The international standards identifies
that internal audit has a role to play
in evaluating and helping to improve
governance processes with a specific
reference to;
• Promoting appropriate ethics and values
within the organization.
• Ensuring effective performance
management and accountability
• Communicating risk and control
information
• Coordinating the activities of the
board, external and internal audit and
management, and communicating what
they do.
According to Sir Adrian Cadbury,
proper corporate governance structure
should specify the distribution of rights
and responsibilities among different
parties in the organization; to include the
board, managers, shareholders and other
On recognizing the
important role that
the internal audit role
plays in a corporate
governance system of
an organization, the
Institute of Internal
Auditors has issued
standard no. 2110 on
‘Governance’ which
states that ‘An effective
internal audit function
provides assurance
that there are
appropriate corporate
governance processes
and internal control
procedures in place.
stakeholders. The CEO
being the top cream in
the organization can only
be satisfied that internal
controls are sufficient
and are working well
through the internal
audit function. Indeed,
since the role of corporate
governance is evolving,
recently, the Financial
Reporting Council, UK
revised its corporate
governance code for
UK companies which
took effect 1 October
2014 which states
that the board should
establish formal and
transparent arrangements
for considering how
they should apply the
corporate reporting, risk
management and internal
control principles and
for maintaining an
appropriate relationship
with companies’
stakeholders.
An effective internal audit function
plays a fundamental role in assisting
the Board to discharge its mandate of
governance and control responsibilities.
The Board should create an enabling
environment and set right the ‘tone at
the top’ to ensure that enough support is
given to internal auditors at all levels in
the organization as they play a key role
in providing advisory roles in terms of
risk mitigation measures, adding value
to the organizations e.t.c. as the internal
audit role goes beyond financial controls
to include audits of non-financial
information and controls surrounding the
production of the information.
On recognizing the important role
that the internal audit role plays in
a corporate governance system of an
organization, the Institute of Internal
Auditors has issued standard no. 2110
on ‘Governance’ which states that ‘An
effective internal audit function provides
assurance that there are appropriate
corporate governance processes and
internal control procedures in place. The
internal audit activity should assess and
make appropriate recommendation for
improving the governance processes in
its accomplishment of the following
objectives;
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