Auditing, Governance and Ethics in Financial Reporting

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Auditing, Governance and Ethics in Financial Reporting

What do you already know about auditors’ roles and governance?

Learning Objectives

At the end of this lesson you will be able to: Describe internal and external audits, explain auditor roles, discuss corporate governance, outline financial reporting's role, identify governance sources in Ireland/UK, explain the ISSB and sustainability-related standards, outline integrated reporting, and discuss ethical dilemmas in accounting.

What is an Audit?

An audit is a systematic examination of financial records, systems, or operations. Its main purpose is to provide assurance on the accuracy and reliability of information and controls.

Internal Audit: Nature & Scope

Internal audit evaluates and improves internal controls, risk management, and governance processes within organisations. Internal auditors are employees but report to the board/audit committee to ensure independence.

External Audit: Nature & Scope

External audits are conducted by independent firms to express an opinion on whether financial statements are ‘true and fair’. They assure stakeholders on a company’s financial integrity.

Auditors’ Roles and Responsibilities

Audit financial statements, provide independent opinion, identify potential misstatements and fraud, ensure regulatory compliance.

External Auditor

Assess and improve risk management, internal controls and governance. Advise management on operational efficiency.

Internal Auditor

Why Effective Corporate Governance?

Corporate governance ensures accountability, transparency, and ethical conduct. It protects stakeholders’ interests and enhances organisational integrity.

Financial Reporting’s Role in Governance

Financial reporting supports governance by offering transparent, accurate and relevant information. Shareholders and boards use reports to monitor performance and hold management accountable.

Sources of Corporate Governance

Ireland

United Kingdom

UK Corporate Governance Code, Companies Act 2006, Financial Reporting Council guidance.

Irish Corporate Governance Annex, Companies Act 2014, Irish Stock Exchange rules.

The ISSB and Sustainability Standards

The International Sustainability Standards Board (ISSB) develops global reporting standards on climate and ESG. Demand for sustainability disclosures is rising from investors and regulators.

Integrated Reporting Explained

Integrated reporting combines financial and non-financial information, linking value creation with strategy, performance and sustainability. It helps organisations communicate holistic value.

Ethics in Financial Accounting

Professional accountants must act with integrity, objectivity and confidentiality. Ethical dilemmas often arise from conflicts of interest or pressures to misstate information.

Summary and Next Steps

You’ve explored the nature and role of audits, the foundations of governance, and challenges of ethical behaviour. Next, consider: How can you apply these principles to ensure transparency and build trust as a future professional?

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