Document Type : opinion article

Authors

• Maryam Sohrabi ¹
• Haider Rabiei ²

¹ university of tehran

² Professor at the University of Tehran and financial, economic and investment strategies consultant

Abstract

This article examines the role and importance of corporate governance, internal controls, and internal auditing in economic entities with a review approach. First, the necessity of an effective internal control system to achieve the organization's goals, deal with unexpected events, and secure the interests of capital owners, the government, and other stakeholders is explained. The Sarbanes-Oxley Act and its key parts, such as the requirement to disclose weaknesses in the internal control system, are considered from the perspective of international laws and their application in Iran. Also, the position of internal auditing as a key element of corporate governance and its role in creating value, improving organizational processes, and promoting financial transparency is explained. Another part of the article is dedicated to the concept of fraud and its distinction from unintentional errors in financial reporting. In addition to pointing out the importance of internal controls in preventing and detecting fraud, the inherent limitations of these controls are also examined. This article, while analyzing recent developments in the field of corporate governance and the requirements of supervisory institutions, emphasizes the role of accountability culture and the importance of developing internal auditing. By reviewing the existing literature and regulations, it highlights the need to update supervisory structures and approaches in Iranian organizations.

Keywords

• Internal control
• internal audit
• corporate governance
• financial fraud
• Sarbanes-Oxley Act

Main Subjects

• Accounting
• Audit
• Financial Management