기업부패 방지를 위한 내부통제구조의 개선방향

Directions for Rebuilding Internal Control Structure to Deter Corporate Fraud

Management has fiduciary duties to owners of a corporation to manage entrusted resources efficiently and to account for its activities in an objective manner. To achieve that purpose, the management is responsible for adopting sound accounting policies, maintaining adequate internal control function, and reporting financial statements fairly in accordance with Generally Accepted Accounting Principles(GAAP). But the management often commits fraud due to certain institutional or personal pressures. To monitor management's corporate activities and reporting process, the owners need to establish board of directors. But the board of directors delegates responsibilities for overseeing financial reporting process to audit committee. But for the audit committee to perform its duties in an effective way, it must adopt a charter which clearly defines the member's term, qualification, experience, duties, responsibilities, and meetings. In addition, the committee must be composed of truly independent members from the management and financial interests of the company, not just of the grey area directors. The audit committee also helps the board of directors to discharge their duties satisfactorily by delivering information it has been acquainted through monitoring process, because it can access to internal and external auditors. Effectively managed audit committee can enhance reliability of the financial statements which ,in turn, restores public confidence to the integrity of financial reporting, resulting in effective functioning of securities market.