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- 10 Marks
Question
External Auditors play a key role in the corporate governance framework. They conduct one of the most important corporate governance checks that help to monitor management’s activities. The audit of financial statements makes disclosures more reliable, thus increasing confidence in the company’s transparency.
Required:
Explain FIVE (5) roles that External Auditors play in Corporate Governance.
Answer
Roles of External Auditors in Corporate Governance:
- External auditors ensure that the financial statements are free from material misstatements, thereby increasing the reliability of financial disclosures.
- They monitor management’s activities and ensure that the company acts in the best interest of shareholders.
- By working with the audit committee, external auditors ensure strong internal controls and effective financial reporting processes.
- External auditors help to detect fraud, errors, and irregularities that could distort the financial statements.
- They provide an independent opinion, adding value to corporate governance by ensuring transparency and accountability.
- Tags: Audit Role, Corporate Governance, External Auditors, Financial Statements, Governance, ISA, Management
- Level: Level 2
- Topic: Internal Audit and Its Relationship with External Audit
- Series: DEC 2022
- Uploader: Theophilus