The Audit Committee and its importance Literature review

The Audit Committee and its importance - Literature review ExampleThe experience of this essay has been thus concentrated on reviewing selected literatures based on the importance of audited account citizens committee in the modern day crease context, working as a monitor as well as a guarantor of viability in merged financial reporting. The ultimate objective of the essay will win emphasise the power held by audit committee to affect the corporate financial operations hobby critical evaluation of secondary evidences. Discussion Historical Background Gendron & Be?dard (2006) revealed that it is owing to this rising draw that organisations are driven towards maintaining transparency at every level of the managerial processes. Correspondingly, as financials hold appreciable importance in managerial processes, the influence of audit committee also expands to a substantial extent. muster from this inference made by Gendron & Be?dard (2006), it can be affirmed that comparative to the traditional business contexts, competition and influences of external forces have increased in manifolds in the 21st century. These external forces, such as rising competition, globalisation, changing customers behaviour and governmental interventions further increase pressure on the organisation to bring to pass and sustain in the industry. Emphasising the moment of audit committees, Cohen & et. al. (2002) further revealed that corporate governance, as a regulatory personify of modern organisations, also imposes substantial impacts on the audit process significances and correspondingly on audit committees functioning. Notably, corporate governance itself is a modern concept of effective organisational management. Therefore, correlating the supervisory functions of corporate governance with the growing significance of auditing and audit committees shall be deemed rationale, when justifying the post modern advancements of corporate financial performances in comparison to the traditional forms. Considering these aspects, audit committees have been argued as a mosaic of corporate governance by Cohen & et. al. (2002), acting as the particle responsible for deterring fraud in the process of ensuring effective financial reporting. Making critical evaluations based on this presumption, Turley & Zaman (2007) revealed that the audit committees influences work stronger and more apparent outside the formal system followed when operating in alliance with corporate governance participants in an organisation. Turley & Zaman (2007) further argues that audit committees can be use for positive as well as negative intentions to gain governance control through governmental incentives within the organisation apart from applying its functions to raise transparency in the corporate reporting procedure. Based on the study of Turley & Zaman (2007), it can thus be inferred that on a positive note, audit committees may pressurise corporate participants to maintain transparen cy, but from a negative viewpoint, it also acts as a apparatus to obtain greater power in the authoritative construction of the organisation. However, in either ways, audit committee is signified to hold considerable power in influencing the overall organisational effectiveness. Methodologies Cohen & et. al., (2002) initiated an