|Abstract:||Corporate management is faced with continuous change, orientation towards the future, and the search for synergies in order to gain competitive advantages in a well-developed business environment.
Business processes in large companies are becoming ever more complex, as a result of which the management is confronted with the inability of exercising supervision over them. Since the management and the owners are aware of the fact that achieving long-term goals requires a systematic approach in managing and overseeing business processes in companies, they strengthen the role of internal audit services. Besides this, they are encouraged by trends in the business environment which raise the awareness of systematically adopting corporate governance, and internal audit is a key part of corporate governance.
The aim of internal audits in companies is to manage risks and achieve long term goals. The internal audit service is answerable directly to the management of the company, it does not perform operative tasks, and it operates independently on the basis of ethical principles, valid standards of the profession, and in line with internal instruments of incorporation. The organizational structure of internal audit services in public undertakings or in groups of public undertakings, i.e. public holding companies, is entirely – in contrast to budget users, banks and insurance companies - up to the management.
On the basis of defined criteria, I analysed possible organisational formats of internal audit services in a public holding company, and I examined their advantages and disadvantages. I belive that the most appropriate organisational format for a group of public undertakings, which are related to a public holding company as its parent company, is the format of a centrally organised internal audit service. The above mentioned organisational format enables achieving the best results regarding the quality of audits, and cost efficiency while guaranteeing independence of the internal audit as the key factor of meeting goals successfully.
In my thesis I examined the influence of the cooperation between the supervisory board and the internal audit service on the independence of the latter. I established that the necessity of obtaining the consent of the supervisory board to key acts of the internal audit service (to the act governing the purpose, the significance and the tasks of the internal audit), the communication between them, and the internal audit service informing the supervisory board about the performance of the undertaking, strengthen the independence of the internal auditor and the efficiency of the supervisory board in overseeing the operations of the organisation.|