Internal Auditing and its Role in Good Corporate Governance-A Case Study of Oriental Quarries

Abstract

The study examines the level of corporate fraud in Zambia and assesses the impact of such fraud on the Zambian economy, corporate behavior, and ethics of the society, and evaluates the effectiveness of both internal audit and corporate governance as currently perceived and practiced in Zambia, particularly in Oriental Quarries. It explores and suggests more effective ways of enhancing internal audit and corporate governance systems as complementary, monitoring, and controlling devices to ensure high standards of corporate conduct. It discusses the internal audit function, role of the internal auditor, and the essentials for effective internal auditing; it explores the concept of corporate governance and its major developments; relevant emerging issues in auditing, the nature of fraud, its detrimental effects, and certain reasons for its occurrence. Data collection was achieved through questionnaires, interviews, observation, participation in seminars, and the study of documentary material from various sources. The dissertation concludes that fraud is more prevalent and highly sophisticated than is currently perceived. The internal audit function is generally weak, existing corporate governance arrangements are weak and inadequate, and that there is a serious lack of probity on the part of both management and employees.  Recommendations to remedy the situation include the compulsory requirement for effective internal audit departments/service, ethics training, ethical codes, ethical advocates, whistleblowing. and the implementation of effective corporate governance systems, to ensure financial discipline, transparency, accountability, and to improve.