Corporate Governance

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Mahesh Kumar Birla

Mahesh Kumar Birla (Querist)
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01 April 2009 What is the Corporate Governance, what is it's Importance and what formalities are required for it?

CA LOKESH KASAT, FCA, M.Com

CA LOKESH KASAT, FCA, M.Com (Expert)
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01 April 2009 Governance: The role of person entrusted with supervision, control and direction of entity.
They are the people who are ultimately responsible for achieving organization goals and objective and also communicate the performance by way of Financial Statements and reports.

Audit matters of Governance Interest
Matters which are both important and relevant to those charged with governance in overseeing the financial reporting and order that is the weakness in internal control system which the auditor has come a crossed to.
(Letter of weakness or mgt. letter)

Auditor duties in relation to AAS-27 on matters charged with governance
1. Communication: - of those matters which has come across during the course of audit.
2. Identification of relevant person that is top level of mgt.
3. Specification in letters of engagement: - in letter of engagement auditor may state that he will communicate only those matters of governance interest that has come across to attention as result of performance.
4. Timeliness: - Such communication has to be made on timely basis so that appropriate decisions can be taken on time.
5. Documentation: - These should be documented as part of working paper.
6. Qualification in Report: - If management doesn’t respond on matters till the date of audit report then he shall qualify the report.
7. Others :- a) Principal of Confidentiality.
b) Law and regulation Governing an enterprises.

Above are some highlights which I provide to CA final Student to undertand the concept of Audit. Do let me know your purpose to understand the concept.