Study Of Relationship Between Internal Audit And Corporate Governance

Management and boards in today's organizations face more dramatic demands, challenges,and opportunities than ever before in fulfilling their commitment to oversight of stakeholder investment.Corporate accountability,governance,risk mitigation are just a few concerns that pepper the thoughts of senior management and boards of directors in contemporary organizations.The ensuring of organization ethics,efficiency,economy,and effectiveness requires a much broader approach today than even as recently as five years ago.Corporate governance is the organization's strategic response to risk.The choice is simple:Either keep up or get out;playing "catch up" is no longer an option.The stakes are too high,the potential losses too great.The laws and regulations of most countries in the world have required organizations to set up the internal audit activity in order to strength the effectiveness of organizations' corporate governance.Corporates are also beginning to aware of the contribution made by the internal audit to corporate governance.The Institute of Internal Auditors redefined the internal audit in June 1999 to include evaluation and improvement of governance process as part of the scope of work of the internal audit.Through documentary analysis,this study examined the factors of effective corporate governance and the purpose,role and function of chief audit executives of Taiwan public companies,non-public companies,and government-owned enterprises on random sampling basis.The English version SPSS 12.0 statistical software was applied to analyze descriptive statistics,the Person product-moment correlation and multiple regressions.The findings and conclusions are as follows:1.Internal audit activity in Taiwan play a limited role in corporate governance process.2.The chief audit executive rated low for the corporate governance practice currently undertaking by the organizations they served. 3.There was a close relationship between key-factors of internal audit activity and corporate governance effectiveness.4.The professional attribute of the internal audit had the highest predictive ability in relation to the corporate governance.Finally,the study offered suggestions to organizations and government authority for enhance the corporate governance effectiveness,and to the internal auditors for effective corporate governance audits.