A Study of Empirical Evidence of Effective Internal Audit in Corporate Governance in Pakistan

Abstract: The purpose of this paper is to provide insights into the effectiveness of internal audit (IA) in corporate governance (CG) especially in banking sector of Pakistan. The current roles and responsibilities of internal audit function and its impact on corporate governance are examined. In order to determine the evolving role of Internal Audit in corporate governance in banking, self-administered questionnaires were distributed among the relevant stakeholders. The effectiveness of IA in CG was determined in terms of its interaction with top management, resources and competencies of audit department and process activities in risk management. The results of the study suggest significant implication and refocus of the role of effective IA in CG in banking sector of Pakistan. Besides, the findings highlight internal audit activities (process) as having higher significance in corporate governance. The findings of this paper are useful in providing fruitful information for the regulators and standardsetters.

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Authors: Nudrat Amin, Ajab Khan Burki