15 September 2014

Lack Of effective auditing led to crisis – Tonio Fenech

 - Wednesday, 25 April 2012, 00:00

Finance Minister Tonio Fenech said the origins of the international financial crisis can be attributed also to lack of effective internal auditing. Recent developments have left no doubt that good corporate governance positively affects economic performance, he said.

He was speaking at an international conference in St Julian’s, organised by RSM on managing risks effectively. There is a strong connection between corporate governance and internal auditing, he said.

Internal audit is crucial in avoiding risks, with its strength being grounded in an independent system, and the ability to inquire and seek information and explanations, understand the accountability relationships, and ensuring that audit recommendations are adopted or acted upon. Internal audit offers an independent but internal view, and as such provides a critical link to the chain that constitutes the governance process, by keeping the board, management and external auditors informed of the risks and internal control issues within the organisation.

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