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The auditor plays several important roles in corporate governance: 1. The auditor reviews all financial statements and accounts to identify any errors and issues an audit report expressing whether the financial statements accurately represent the company's financial situation. 2. The auditor evaluates internal controls to understand the client's environment and select the best audit plan, notifying management via letter of any internal control deficiencies. 3. The auditor represents shareholder interests through an independent audit report that discloses the company's financial performance and accuracy of reports without management interference.

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33 views2 pages

Cat 1

The auditor plays several important roles in corporate governance: 1. The auditor reviews all financial statements and accounts to identify any errors and issues an audit report expressing whether the financial statements accurately represent the company's financial situation. 2. The auditor evaluates internal controls to understand the client's environment and select the best audit plan, notifying management via letter of any internal control deficiencies. 3. The auditor represents shareholder interests through an independent audit report that discloses the company's financial performance and accuracy of reports without management interference.

Uploaded by

Abigail Wavinya
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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ABIGAIL WAVINYA NGUNGI

BCMC01/2438/2019

CAT 1

1. Describe the role of the auditor in the corporate governance system

Providing a Report on an Audit- The main duty of an auditor is to review all of the
company's financial statements and accounts and look for any errors. The primary
responsibility of an auditor is to express to the firm, in the form of an audit
report, whether or not the financial statements present an accurate and fair
picture of the company's financial situation. The auditor must ensure that the
produced report complies with all applicable Companies Act rules.

Internal control evaluation: is crucial to the auditor's ability to carry out their
responsibility. This will give the auditor the chance to comprehend the client's
environment and contribute to the selection of the best audit plan. According to
ISA 400, auditors are required to notify management of any type of vulnerability
via a letter describing the internal control's deficiency.

Accountability: According to research, an external auditor's responsibility to


assess control and operation improves corporate governance. Accountability-
enforcing methods and policies are introduced by external auditors. For instance,
an external auditor could suggest sanctions for such acts and make suggestions to
prevent recurrence if the financial statements supplied by management were
distorted through the inflation of data.
Representing the interests of the company's shareholders: is one of the
responsibilities of an external auditor in corporate governance. Typically, this is
accomplished through the independent auditors' report, which is free from
management interference. The organization's financial situation and
performance, as well as the accuracy of the financial reports, must be disclosed by
external auditors.
Risk Assessment and Mitigation: By doing a risk assessment, external auditors
support company governance. A risk assessment is typically carried out to spot
potential trouble spots and evaluate the protective measures a business has in
place against corporate fraud and corruption.
2. Discuss the importance of Mainstreaming Ethics into Corporate
Governance in Cooperative societies in Kenya
 Understand the constitutional foundations of ethics and integrity and how
they apply to business.

 Mobilize and build consensus on the values of integrity, justice, fairness


and transparency that should guide decision making within the
organization.
 Gain knowledge on requisite structures for managing ethics including the
framework set by Ethics and Anticorruption Commission and performance
contract targets.
 Understand how mainstreaming ethics can reduce incidences of
corruption.
 Understand the roles and responsibilities of Integrity committees, their
terms of reference and performance standards in relation to performance
contracting activities.
 Strengthen capacity of the committees in risk assessment, development of
integrity plans and to be transparent, accountable, and responsive to the
organizations in the management of human behaviour.
 Expose members to various indices on performance management such as
the sustainability index.

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