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Internal Audit Role

In: Business and Management

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Internal audit’s role in modern corporate governance
Thought leadership series

Risk and Advisory Services

Internal audit’s role in modern corporate governance

Recent events have highlighted the critical role of boards of directors in promoting good corporate governance. In particular, boards are being charged with ultimate responsibility for the effectiveness of their organisations’ internal control systems. An effective internal audit function plays a key role in assisting the board to discharge its governance responsibilities. Yet how does the board – and its audit committee – satisfy itself that internal audit is functioning effectively and efficiently?

The board’s responsibility for internal controls
Through working with a broad range of organisations in Hong Kong and internationally, KPMG has identified a number of best practices in relation to the role played by the board audit and/or risk management committees. s Recent events have highlighted the critical role of boards of directors in

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Assessing the scope and effectiveness of the systems established by management to identify, assess, manage and monitor the various risks arising from the organisation’s activities. Ensuring senior management establishes and maintains adequate and effective internal controls. Satisfying itself that appropriate controls are in place for monitoring compliance with laws, regulations, supervisory requirements and relevant internal policies. Monitoring and reviewing the effectiveness of the internal audit function. Reviewing and assessing the internal audit plan and its progress. Ensuring that the internal audit function is adequately resourced and enjoys appropriate standing within the organisation. Considering management’s response to major internal audit recommendations and progress in their implementation. Approving the

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