Auditing Corporate Governance Statements in Greece – the role of internal auditors

• DOI: https://doi.org/10.1108/CG-02-2018-0095
• Pages: 1007-1020
• Date: 05 October 2018
• Published date: 05 October 2018
• Author: Andreas Koutoupis,Michail Pazarskis,George Drogalas
• Subject Matter: Corporate governance,Strategy

Auditing Corporate Governance

Statements in Greece –the role

of internal auditors

Andreas Koutoupis, Michail Pazarskis and George Drogalas

Abstract

Purpose –The purpose of this paper is to examine the role of internal audit with respect to Auditing

CorporateGovernance Statementsbased on a practical approach. Moreover,it examines the application

of internalcontrol best practicesin the Athens publiclylisted firms based on a seriesof related statements.

Design/methodology/approach –The authors conducted all large and mediumcapitalization publicly

listed companiesvia a research questionnairewhich forms a basis of a descriptive researchanalysis. The

methodology is based on the bestworldwide acceptable practices as represented by the Committeeof

Sponsoring Organizations internal control –integrated framework, as well as the relevant laws and

regulationsand best practices with respect to CorporateGovernance Statements.

Findings –The research concludesthat internal auditors limit their role in verifying compliancewith the

relevant laws and regulationsrather than adopt a consulting role toward theimprovement of the content

and quality of Corporate Governance Statements information. Also, it contributes to the corporate

governance research by verifying that the effectiveness of internal controls contributes to sound

corporategovernance practices.

Practical implications –Internal auditorsdepending on the organization they serve may adopt different

roles regarding Corporate GovernanceStatements preparation, review and audit such as consultative

which mayadd valueto the qualityof CorporateGovernance Statements.

Originality/value –It is the first research regardingquality characteristics of the Corporate Governance

Statements and the roleof internal audit in Greece, and it provides the basis forfurther research among

EuropeanUnion countries.

Keywords Internal control, Internal auditing, Corporate Governance Statements

Paper type Research paper

1. Introduction

Corporate governance is considered as a top priority in most of the publicly and in a certain

amount of non-publicly listedenterprises, as it involves a large number of stakeholders such

as Board of Directors (BoD), Executives, Non-Executives, Investors, Governments and

Academics. “Corporate Governance”as a term first appeared in the 1980s (Earl, 1983). Yet,

the field of corporate governance has been previously encountered in the prevalent model

of Principal-Agent (Agency)theory (Jensen and Meckling, 1976).

OECD (2015) corporate governance publication refers to corporate governance as a set of

relationships between a company’s management, its board, its shareholders and other

stakeholders. Corporate governance also provides the structure through which the

objectives of the company are set, and the means of attaining those objectives and

monitoring performance are determined(Nerantzidis and Filos, 2014).

The adoption of corporate governancebest practices was to guide the operation of the BoD

and ensure that decisions will protect shareholder and other stakeholders’ interests

Andreas Koutoupis is

based at the Department of

Accounting and Finance,

Technological Educational

Institute of Thessaly, Larisa,

Greece, Greece.

Michail Pazarskis is based

at the Department of

Accounting and Finance,

Technological Educational

Institute of Central

Macedonia, Serres,

Greece.

George Drogalas is based

at the Department of

Business Administration,

University of Macedonia,

Thessaloniki, Greece.

Received 22 February 2018

Revised 22 July 2018

2 August 2018

Accepted 2 August 2018

DOI 10.1108/CG-02-2018-0095 VOL. 18 NO. 5 2018, pp. 1007-1020, ©Emerald Publishing Limited, ISSN 1472-0701 jCORPORATE GOVERNANCE jPAGE 1007