Role of internal auditing in corporate governance: Two case studies from Turkey

Corporate governance can be defined as a process whereby business organizations take decisions. Corporate collapses that have been experienced undermined the trust in corporate sector. Corporate governance emerged as a system which can make companies stronger against the crises and increase the trust of investors.Internal auditing is an independent and objective assurance and consulting activity which adds value and improves the operations of an organization and evaluates the effectiveness of risk management, control and governance processes.Internal auditing is an important function for the establishment of sound corporate governance. Internal audit activity assesses and makes recommendations for improving the governance process in its accomplishment of promoting appropriate ethics and values, ensuring effective performance management and accountability, effectively communicating risk and control information to appropriate areas of the organization and communicating information among related parties.In this thesis corporate governance, internal control, internal auditing and the role of internal auditing in corporate governance have been studied in the theoretical framework. For the applied section, case studies have been conducted in two commercial banks in order to reach conclusions about internal audit applications of commercial banks that operate in Turkish national banking system.At the end of the literature review and the case studies, it has been found that internal auditing has an important role in corporate governance. Moreover, the case studies indicated the profile and applications of internal auditing in commercial banks in Turkey.