Debjit Chakraborty Roll-11 MBA In Finance Calcutta University

An employee of a company charged with providing independent and objective evaluations of the company's financial and operational business activities, including its corporate governance. Internal auditors also provide evaluations of operational efficiencies and will usually report to the highest levels of management on how to improve the overall structure and practices of the company.

Corporate Governance is the system by which companies are directed and controlled
Cadbury Report (UK), 1992

to do with Power and Accountability: who exercises power, on behalf of whom, how the exercise of power is controlled.
Sir Adrian Cadbury, in Reflections on Corporate Governance, Ernest Sykes Memorial Lecture, 1993

fundamental objective of corporate governance is the enhancement of the longterm shareholder value while at the same time protecting the interests of other stakeholders.
SEBI (Kumar Mangalam Birla) Report on Corporate Governance, January, 2000

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Supervisory Board/ Committee/ Team

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Audit Committee
Internal Audit Statutory Audit

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6. 7. 8.

Disclosure of information
Risk management framework Internal Control framework Whistle blower policy

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Strengthen management oversight functions and accountability Balance skills, experience and independence on the board appropriate to the nature and extent of company operations Establish a code to ensure integrity Safeguard the integrity of company reporting Risk management and internal control

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Disclosure of all relevant and material matters

Recognition and preservation of needs of shareholders

The key role of internal auditor is to assist the board and/or its audit committee in discharging its governance responsibilities by delivering: Systematic analysis of business processes and associated controls. Reviews of the existence and value of assets. A source of information on major frauds and irregularities.

Ad hoc reviews of other areas of concern, including unacceptable levels of risk. Reviews of the compliance framework and specific compliance issues. Reviews of operational and financial performance. Recommendations for more effective and efficient use of resources. Assessments of the accomplishment of corporate goals and objectives. Feedback on adherence to the organization's values and code of conduct/code of ethics.