The Effectiveness of Audit Committee in Private Sector

By

ACKNOWLEDGEMENT

My thanks go out to all who have helped me complete this study and with whom this project may have not been possible. In particular, my gratitude goes out to friends, facilitator and family for extensive and helpful comments on early drafts. I am also deeply indebted to the authors who have shared my interest and preceded me. Their works provided me with a host of information to learn from and build upon, also served as examples to emulate.

DECLARATION

I, [names and surname here], declare that the contents of this dissertation/thesis represent my own unaided work, and that the dissertation/thesis has not previously been submitted for academic examination towards any qualification. Furthermore, it represents my own opinions and not necessarily those of the University.

Signed __________________ Date _________________

ABSTRACT

The present topic of the study is the “Effectiveness of the auditing in the private sector” is an important topic that has been discussed in the past with greater precision. The private sector is completely different from the public sector that is accountable for the different laws, values and principles in terms of accounting practice. It has been observed that the private sector is usually not held responsible for the auditing practice. The objective of an audit committee is to improve accountability by providing oversight of financial and audit issues, internal control and regulatory compliance. Monitoring internal controls is a vital function of the audit committee. Internal controls are necessary to help prevent misappropriation of resources and to ensure fiscal accountability. An audit committee can assist municipal managers in reviewing, evaluating and applying internal controls, thereby strengthening the financial reporting environment of local governments. In prior research, audit committee members indicated that internal control evaluation was one of the most important oversight areas faced by audit committees. While auditing remains a key function in the area of organizational monitoring and control, it is also a risky affair that can lead to certain issues. The challenges of compliance with new requirements of organization-wide communication, reporting and certification, affect everyone at different levels, whether public or business governments. With respect to entities subjected to the requirements of compliance, auditing is one of the functions of an entity's more greatly affected by these new rules. Although a third party of an auditing team remains unbiased to the organizational functions, he has no interest in the affairs of the company. At the same time, some supervisory committees or individual members also have to keep a watch on the roles performed by the auditor.

TABLE OF CONTENTS

ACKNOWLEDGEMENTII

DECLARATIONIII

ABSTRACTIV

CHAPTER 1: INTRODUCTION1

1.1 Background of the Study1

1.2 Objectives of the Study2

1.3 Source and Methodology2

1.3.1 Data Collection & Analysis3

1.4 Report Structure by Chapter3

Chapter 1: Introduction3

Chapter 2: Theory of Topic4

Chapter 3: Practice4

Chapter 4: Application of Theory to Practice4

Chapter 5: Conclusion & Recommendation5

CHAPTER 2: THEORY OF TOPIC6

2.1 Effectiveness of Auditing Committees in Private Sector6

2.2 Auditing in Business7

2.3 Defining the Role of an Auditor7

2.5 Traditional Role8

2.6Active Participation and Role8

2.7 Problems arising from "Doing Too Much Too ...