IDEAS home Printed from https://ideas.repec.org/a/ddj/fseeai/y2024i1p36-42.html
   My bibliography  Save this article

The Role of Financial Audit in the Corporate Governance Process: An In-depth Analysis

Author

Listed:
  • Hussein Ali Mroueh

    (Bucharest University of Economic Studies, Bucharest, Romania)

Abstract

Fraud presents a substantial risk to the overall financial integrity of the global corporate environment. This empirical study investigates practical approaches for firms to strengthen their defenses against fraud, with a focus on improving internal controls, optimizing internal audits, and implementing effective corporate governance. Fraud, which involves compromising the accuracy of financial information, poses dangers that go beyond financial losses. It also affects stakeholder trust and market confidence. Therefore, it is important for company executives, auditors, and policymakers to proactively identify and mitigate these risks. The combination of internal controls, internal audits, and corporate governance plays a crucial role in combating fraud. Internal controls provide the basic principles of financial practices, internal audits closely examine transactions, and effective company governance promotes ethical behavior, resulting in a strong framework for preventing fraud. Based on an extensive examination of existing literature, this study offers practical observations that enable businesses to identify, tackle, and prohibit fraudulent activities. Practical suggestions can help manage the relationship between internal controls, internal audits, and corporate governance. These suggestions can improve audit procedures, enhance transparency, and strengthen the reliability of financial reporting.

Suggested Citation

  • Hussein Ali Mroueh, 2024. "The Role of Financial Audit in the Corporate Governance Process: An In-depth Analysis," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 1, pages 36-42.
    • Handle: RePEc:ddj:fseeai:y:2024:i:1:p:36-42
    DOI: 10.35219/eai15840409385
    as

    Download full text from publisher

    File URL: http://eia.feaa.ugal.ro/images/eia/2024_1/Mroueh.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.35219/eai15840409385?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Adriana Girneata & Cosmin Octavian Dobrin, 2015. "Complaining Behaviour and Consumer Safety: Research on Romania Online Shopping," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 1, pages 161-175.
    2. Richard Barker, 2015. "Conservatism, prudence and the IASB's conceptual framework," Accounting and Business Research, Taylor & Francis Journals, vol. 45(4), pages 514-538, June.
    3. Kirsty Rae & Nava Subramaniam, 2008. "Quality of internal control procedures: Antecedents and moderating effect on organisational justice and employee fraud," Managerial Auditing Journal, Emerald Group Publishing, vol. 23(2), pages 104-124, January.
    4. Husam Aldamen & Keith Duncan & Simone Kelly & Ray McNamara & Stephan Nagel, 2012. "Audit committee characteristics and firm performance during the global financial crisis," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 52(4), pages 971-1000, December.
    5. Normah Omar & Zulaikha ‘Amirah Johari & Malcolm Smith, 2017. "Predicting fraudulent financial reporting using artificial neural network," Journal of Financial Crime, Emerald Group Publishing Limited, vol. 24(2), pages 362-387, May.
    6. Adi Eleonor TRIFU & Adriana GÎRNEA?Ã & Ana Mãdãlina POTCOVARU, 2015. "The Impact of Regulations upon the Startup of New Businesses," Economia. Seria Management, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 18(1), pages 49-59, June.
    7. Alice Klettner & Thomas Clarke & Martijn Boersma, 2014. "The Governance of Corporate Sustainability: Empirical Insights into the Development, Leadership and Implementation of Responsible Business Strategy," Journal of Business Ethics, Springer, vol. 122(1), pages 145-165, June.
    8. Gatzert, Nadine, 2015. "The impact of corporate reputation and reputation damaging events on financial performance: Empirical evidence from the literature," European Management Journal, Elsevier, vol. 33(6), pages 485-499.
    9. Javed Siddiqui, 2010. "Development of Corporate Governance Regulations: The Case of an Emerging Economy," Journal of Business Ethics, Springer, vol. 91(2), pages 253-274, January.
    10. Steven Toms, 2019. "Financial scandals: a historical overview," Accounting and Business Research, Taylor & Francis Journals, vol. 49(5), pages 477-499, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Simona Galletta & Sebastiano Mazzù & Valeria Naciti & Carlo Vermiglio, 2021. "Sustainable development and financial institutions: Do banks' environmental policies influence customer deposits?," Business Strategy and the Environment, Wiley Blackwell, vol. 30(1), pages 643-656, January.
    2. Francesco Gangi & Antonio Meles & Eugenio D'Angelo & Lucia Michela Daniele, 2019. "Sustainable development and corporate governance in the financial system: Are environmentally friendly banks less risky?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 26(3), pages 529-547, May.
    3. Md. Borhan Uddin Bhuiyan & Solomon Opare & Zahir Ahmed, 2024. "Does Audit Committee Busyness Affect Financial Restatement? Evidence from Audit Committee Share Ownership," Australian Accounting Review, CPA Australia, vol. 34(1), pages 29-54, March.
    4. Baumöhl, Eduard & Iwasaki, Ichiro & Kočenda, Evžen, 2019. "Institutions and determinants of firm survival in European emerging markets," Journal of Corporate Finance, Elsevier, vol. 58(C), pages 431-453.
    5. Yusuf, Fatima & Yousaf, Amna & Saeed, Abubakr, 2018. "Rethinking agency theory in developing countries: A case study of Pakistan," Accounting forum, Elsevier, vol. 42(4), pages 281-292.
    6. Martha Coleman & Mengyun Wu & Mark Baidoo, 2020. "Corporate Governance and Working Capital Policy: An Unobserved Influence," Emerging Economy Studies, International Management Institute, vol. 6(1), pages 106-122, May.
    7. Francesca Bernini & Fabio La Rosa, 2024. "Research in the greenwashing field: concepts, theories, and potential impacts on economic and social value," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 28(2), pages 405-444, June.
    8. Wong, Jin Boon & Zhang, Qin, 2022. "Stock market reactions to adverse ESG disclosure via media channels," The British Accounting Review, Elsevier, vol. 54(1).
    9. Rafia Afrin & Ni Peng & Frances Bowen, 2022. "The Wealth Effect of Corporate Water Actions: How Past Corporate Responsibility and Irresponsibility Influence Stock Market Reactions," Journal of Business Ethics, Springer, vol. 180(1), pages 105-124, September.
    10. Ahsan Habib & Mabel D' Costa & Hedy Jiaying Huang & Md. Borhan Uddin Bhuiyan & Li Sun, 2020. "Determinants and consequences of financial distress: review of the empirical literature," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 60(S1), pages 1023-1075, April.
    11. Cui, Li & Chan, Hing Kai & Zhou, Yizhuo & Dai, Jing & Lim, Jia Jia, 2019. "Exploring critical factors of green business failure based on Grey-Decision Making Trial and Evaluation Laboratory (DEMATEL)," Journal of Business Research, Elsevier, vol. 98(C), pages 450-461.
    12. Hayoun, Shaul, 2019. "How fair value is both market-based and entity-specific: The irreducibility of value constellations to market prices," Accounting, Organizations and Society, Elsevier, vol. 73(C), pages 68-82.
    13. María Dolores Aledo‐Ruiz & Eva Martínez‐Caro & José Manuel Santos‐Jaén, 2022. "The influence of corporate social responsibility on students' emotional appeal in the HEIs: The mediating effect of reputation and corporate image," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(3), pages 578-592, May.
    14. Leo Vashkor Dewri, 2022. "A Critical Assessment of Interrelationship Among Corporate Governance, Financial Performance, Refined Economic Value Added to Measure Firm Value and Return on Stock," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(4), pages 2718-2759, December.
    15. Christian Eckert, 2020. "Risk and risk management of spillover effects: Evidence from the literature," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 23(1), pages 75-104, March.
    16. Yang, Xiaoping & Cao, Dongmei & Andrikopoulos, Panagiotis & Yang, Zonghan & Bass, Tina, 2020. "Online social networks, media supervision and investment efficiency: An empirical examination of Chinese listed firms," Technological Forecasting and Social Change, Elsevier, vol. 154(C).
    17. Persakis, Anthony & Iatridis, George Emmanuel, 2016. "Audit quality, investor protection and earnings management during the financial crisis of 2008: An international perspective," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 41(C), pages 73-101.
    18. Mirela POPA & Irina-Iulia SALAN?Ã, 2015. "Business Organizations’ Positive Socio-Economic Impact on Society - a Step Beyond CSR," Economia. Seria Management, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 18(2), pages 244-263, December.
    19. Victoria Bogdan & Claudia Diana Sabău-Popa & Marcel-Ioan Boloș & Dorina-Nicoleta Popa & Mărioara Beleneși, 2022. "Tracking Waste Management Information Disclosure Behavior Connected to Financial Performance through Moderating Variables," IJERPH, MDPI, vol. 19(20), pages 1-25, October.
    20. Jaehong Lee & Suyon Kim & Eunsoo Kim, 2021. "Designation as the Most Admired Firms to the Sustainable Management of Taxes: Evidence from South Korea," Sustainability, MDPI, vol. 13(14), pages 1-17, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ddj:fseeai:y:2024:i:1:p:36-42. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gianina Mihai (email available below). General contact details of provider: https://edirc.repec.org/data/fegalro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.