Is there a Nexus between Internal Audit and Corporate Governance?

Abstract

Good corporate governance is indispensable for the progress of any business entity. Its importance was highlighted in the 2002 Mckinsey overview which expressed that corporate governance is at the core of investment choices. Furthermore, investors consider corporate governance on the same footing as of other financial metrics while assessing decisions regarding selection of their portfolio. Internal audit has been the focal point in the discussion on corporate governance. The exercises of internal audit can be leveraged to boost effective governance. Internal audit emphasizes on creating value for the business entity, and on assessing and recommending upgrades to corporate governance systems of the entity. This study reviews the existing repository of literature and attempts to establish a link between internal audit and better corporate governance practices.