Internal audit and corporate governance: a literature review

Abstract

This article aims to analyze the contribution of internal auditing to improving corporate governance. Indeed, the analysis of the systematic literature review on internal auditing and corporate governance indicates that there is a relevant link and a positive influence of internal auditing on improving corporate governance ((Boecker et Goodstein, 1993; Daily et Dalton, 1994; Paape et al, 2003 ; Sarens et Abdo lmohammadi, 2011)).

Given the complexity of modern management, the innovation of new management techniques, the requirements for maintaining good organization, and in order to achieve its objectives in an unstable environment, all companies are obligated to establish relevant management rules to ensure efficiency, productivity, and profitability, that is, to implement rigorous control and management systems. The internal audit function provides reasonable assurance in this regard that the operations conducted, and the decisions made contribute to the achievement of the company's objectives, and if necessary, would provide recommendations to remedy the situation. Furthermore, the role of internal auditing in improving corporate governance should be appreciated at three levels: at the level of reducing information asymmetries, at the level of evaluating the internal control system, and at the level of risk management. The weight and importance of this function on the effectiveness of the corporate governance system has led us to focus, in the context of our study, on the challenges and importance of internal auditing as a tool for corporate governance and to analyze its contribution to improving the present process in private companies in Morocco.

Keywords: Internal audit, corporate governance, good governance.

Classification JEL: M4

Paper type: Theoretical Research