Role of internal audit in organizational governance

Abstract

Current business environment experiences rapid and significant change with far reaching consequences for organizations worldwide. Management responses to fierce global competition include improved quality and risk management initiatives, reengineered structures and processes and greater accountability to ensure more timely, reliable and relevant information for decision-making and to secure confidence and trust of the investors. The article analyses efficient organizational governance establishment and support issues and the role of internal audit in the governance structure. Taking into account the scope of organization direction and control, internal audit takes on important roles, integrating several other governance and control aspects, in organizational governance and stands out as the most important, single mechanism for ensuring adequate and effective governance of the organization. The article provides criteria to assess effectiveness of organizational governance with respect to utilization of internal audit function.