develop a set of criteria for assessing the effectiveness of their internal control functions (Committee on the Financial Aspects of Corporate Governance, 1992, Section 5.16). Additionally, to be effective, the reports prepared and the records maintained by an internal auditing function must be relevant, reliable, accessible, complete, accurate, and timely (Chartered Institute of Management Accountants, 1999).
Chapman (1995) noted that the role of the internal auditor has been changed dramatically by computer processing and especially by computer software. These tools facilitate the work of the internal auditor in meeting the new responsibilities accruing to the internal audit function as a consequence of changes in the approach to corporate governance and the requirements of SAS 300. Both the Cadbury Report and SAS 300 are parts of an international reform of the concept of corporate governance (Norburn, Boyd, Fox, & Muth, 2000; Monks, & Minow, 1995). The Organization for Economic Cooperation and Development (OECD) stated that (2000)
Certain components of internal control frameworks are particularly effective in the prevention of illegal acts including bribery. Such internal control components are integral to effective corporate governance practices and include the following: setting the "tone at the top" which includes making top management of a company responsible for establishing and maintaining an effective internal control system with appropriate oversight by corporate monitoring bodies; adopting a code of conduct which provides information and guidance to those within a company about the company's philosophy toward ethical business conduct and the basic principles governing that conduct; and establishing processes to monitor compliance with policies and procedures that are implemented to prevent and/or detect illegal acts including bribery (p. 1).
The Effects of SAS 300 Requirements on the Role of the Internal Audit ...