Notwithstanding corporate scams in recent times, Indian companies are generally 'less receptive' to the idea of internal audit, which can help in strengthening risk management, says global consultancy Protiviti.
"When it comes to internal auditing, Indian companies are less receptive to the whole idea, as compared to entities in many developed markets.
"There also seems to be a lack of awareness about the value of such audits," Protiviti Executive Vice-President(International Operations) Gary Peterson said.
Protiviti, which has about 100 clients in India, is a leading independent business and risk consulting firm that specialises in internal audit.
Generally, internal audits helps companies' in improving their risk management, operational efficiency and overall corporate governance standards.
Internal audits are not mandatory and many companies do away with the idea, as most of them focus just on cost aspects, Peterson pointed out.
"These (internal) audits provide an opportunity to know whether the right governance practices are in place in a particular company. The audit process would look at internal controls, risk management plans and financial reports, among others," he said.
However, Peterson noted that the effectiveness of such audits depend on individual companies.
The nearly Rs 10,000-crore Satyam scam, which came to light early last year, had raised questions about corporate governance and the role of auditors, since the wrongdoing was perpetrated by the company's founder-chairman B Ramalinga Raju over many years.
When asked about corporate governance practices in India, Peterson said the issues experienced here are much different those witnessed in developed countries such as the US.
"In a country like India, where the economy is seeing a high growth, the issues (of corporate governance) are different from many others (markets). There is also a need for more awareness about the role of a company's board of directors in corporate governance," he said.