Internal Audit in Corporate Governance Frameworks - European Models
Results of an expert survey investigating generic normative options in major European corporate governance norms (DE, CH, AT, UK, FR, NL).


The positioning of internal audit is undergoing changes.

Reason are conceptional weaknesses of organisational control systems, causing material disruptions in globally interconnected economies.

Effective corporate governance regimes are seen as one cornerstone addressing the underlying issues.

Research Objectives

How is internal audit's role established in corporate governance norms? Which models are seen as best practice?

The survey establishes generic normative options based on major transnational and national corporate governance (CG) rules. These options were assessed through surveying a Pan-European group of 30+ leading experts.

Selected Results

Key internal audit activity area to be determined in corporate governance norms is the internal control system including risk management.

The responsibility for establishing an internal audit function is primarily with the audit committee, but also with the board as a whole.

Audit committees shall monitor the internal audit function and approve the internal audit plan.

The audit committee chairman is seen as having the overall responsibility for the audit function's effectiveness, whereas the chief executive (CEO) carries the administrative responsibility. Results of the audit activity shall be reported primarily to the executive directors and the audit committee.

Annual reports should contain high-level information on the internal control system including the existence of an effective internal audit function.

More Information

Presentation at the First Global Academic Conference on Internal Auditing and Corporate Governance, Rotterdam 2008 > link

The complete article can be downloaded from the Swiss audit journal's homepage > link