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External Auditing - Essay Example
External auditing has gained importance in the recent past in view of increased need of openness in corporate governance. Corporate governance is important in ensuring that there is overall openness in the running of the organisation. Increased incidences of conspiracy and corruption in the corporations have prompted the shareholders to rely on the service of external auditors…
External auditors have played an important role in organisation. Even in corporation which have been spending a lot of money in their internal auditing system, some have been found to be seeking for the service of external auditors. Therefore there is a question that is being raised on this emerging trend in auditing and the role that is being played by the external auditors in corporate governance.
This trend of seeking the service of external auditors has grown to be an issue in corporate governance stemming from the understanding of trust that shareholders have on the board and the auditing system of the organization. In many instances, it is the board which is trusted with the everyday running of the organization and therefore it is expected that this board should be trusted even with the results of the internal auditors. But the recent trend in corporate governance has shown that there is an increased preference of external auditors as the main auditor for corporation and the internal auditors have been reduced to plying the second role in helping the external auditors in their work. ...