Corporate Governance and Audit Process

International Conference on Humanities, Society and Culture (ICHSC) Kuala Lumpur, Malaysia, November 4-6, 2011, International Proceedings of Economics Development and Research (IPEDR) Vol.20, International Association of Computer Science and Information Technology Press (IACSIT Press), Singapore

6 Pages Posted: 3 May 2013

See all articles by Masood Fooladi

Masood Fooladi

Islamic Azad University, Mobarakeh Branch

Maryam Farhadi

National University of Malaysia (UKM)

Date Written: November 6, 2011

Abstract

Based on agency theory, the importance of Corporate Governance (CG) is to reduce agency conflicts between those who control and those who own the residual claims in a firm. Auditors can be also considered as a part of CG structure because they monitor the quality of the financial reporting process to reduce the information asymmetry between managers and stakeholders. The interaction between CG and external audit services often suggest that they are complementary. In fact, auditors must work with other factors in the CG structure to ensure that stakeholders receive the highest quality financial reports and help to protect their interests. Therefore, the objective of this study is to explore the perceptions of experts on the CG consideration in outlining and directing an audit engagement. A semi-structured interview is conducted with two certified public accountants (CPA) to obtain a consensus on the opinion of experts. Analyzing of interviewees’ response suggests that auditors consider CG as a monitoring device in their audit engagement. Among different aspects of CG the board of directors is more considered by auditors. CG has more influence when auditors are planning an audit process.

Keywords: corporate governance, auditors, audit process, board of director

JEL Classification: G34

Suggested Citation

Fooladi, Masood and Farhadi, Maryam, Corporate Governance and Audit Process (November 6, 2011). International Conference on Humanities, Society and Culture (ICHSC) Kuala Lumpur, Malaysia, November 4-6, 2011, International Proceedings of Economics Development and Research (IPEDR) Vol.20, International Association of Computer Science and Information Technology Press (IACSIT Press), Singapore, Available at SSRN: https://ssrn.com/abstract=2259531

Masood Fooladi (Contact Author)

Islamic Azad University, Mobarakeh Branch ( email )

Department of Accounting
Mobarakeh Branch
Mobarakeh, Isfahan
Iran

Maryam Farhadi

National University of Malaysia (UKM) ( email )

Bandar Baru Bangi, Selangor 43000
Malaysia

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