THE ROLE OF BOARD AND INTERNAL AUDITORS IN THE MODERN CORPORATE GOVERNANCE

Governance is the system by which organization is directed and controlled. The governance framework is composed of two dimensions: the conformance and the performance dimension. The conformance responsibilities focus on providing assurances to stakeholders. The performance responsibilities focus on strategy, value creation, and resource utilization. A basic principle of governance is assessment of the governance process by an idependent internal audit activity. The cornerstone of effective governance are the board of directors, executive management, the internal auditors, and the external auditors. The organization's board and its senior management are accountable for the effectiveness of the governance, risk management and control processes. They rely on internal auditing for objective assurance on these processes. The internal audit activity is ultimately responsible to the board of directors. By providing assurance on the organization's governance, risk management, and control processes internal auditing helps the organization achieve its strategic, operational, financial, and compliance objectives, and adds value to the organization and its stakeholders.