The paper “ The UK System of Corporate Governance - Internal and External Audit Functions” is an excellent variant of the assignment on management. In the United Kingdom, the Cadbury Committee developed the initial version of the UK Corporate Governance Code in 1992. Paragraph 2.5 of the Code defines corporate governance refers to a set of rules and principles and a system of practices that define and direct how a company’ s operations should be managed and controlled. It balances the interests of stakeholders to a company, including the board of directors, executive management, shareholders, suppliers, customers, government regulators, and financiers (Financial Reporting Council 2012).
This paper discusses the UK system of corporate governance, and its key components, and its objectives. It further explores the purposes and differences between internal and external audit activities and remits, as well as how the internal audit function complements the role of the external auditor. Lastly, it discusses the arguments for and against corporate engagement in social responsibility activities. Q4.The UK system of corporate governance, its key components, and its objectivesThe UK corporate governance system uses a market-based approach that permits the board to maintain flexibility in how it systematizes its functions and performs its responsibilities to ensure that it is effectively answerable to company shareholders.
This approach is facilitated by the UK Corporate Governance Code, which operates on the strength of ‘ comply or explain’ approach (Cronin & Murphy 2012). The UK Corporate Governance Code also has a range of key components intended to ensure the effective functioning of the board. This includes identification of good governance practices that relate to the board and board’ s committees as well as internal control, and risk management.
The components also include an effective board that provides leadership, prescribed structure, or remuneration to provide transparent procedures for executive remuneration and relationship with shareholders to ensure a link with shareholders.
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