Economic Review, Vol. 72 No. 4, 2021.
Original scientific paper
https://doi.org/10.32910/ep.72.4.2
RESEARCH ON THE RELATIONSHIP BETWEEN GOVERNANCE STRUCTURES AND EXTERNAL AUDIT IN CORPORATE GOVERNANCE
Mario Filipović
Abstract
Quality communication of external auditors with governance structures is of paramount importance for the efficient operation of credit institutions. Therefore, the question arises as to whether the formation of a model for the relationship of external auditors and the governance structures of a credit institution can enhance the work of an external audit, on the one hand, and the governance structures of a credit institution, on the other. The contribution of this research is: an analysis of the quality of external auditors’ communication with the credit institution’s governance structures and the impact of the quality of these relationships on the effectiveness of external audit and governance structures; an analysis of the quality of external auditors’ communication with the credit institution’s audit committee and the impact of the quality of those relationships on the effectiveness of the external audit and governance structures, in particular the supervisory board; identifying whether external audit inefficiencies are related to the opening of bankruptcies of credit institutions and determining whether the proposed model of relations between the external auditors and the credit institution’s governance structures contributes to the better work of the external audit and to the better functioning of the credit institution’s governance structures. The survey, conducted in the Republic of Croatia, involved external auditors that are or were auditing the annual financial statements of credit institutions, members of the management and supervisory boards of credit institutions, and insolvency office holders and professional staff of credit institutions in bankruptcy. The results of the empirical study confirm that the tested communication model contributes to a more efficient operation of the credit institution’s external audit and governance structures.
Keywords
quality communication, external auditors, governance structures, credit institutions
Hrčak ID:
260567
URI
Publication date:
16.7.2021.
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