Auditors are required to assess various components of corporate governance. Respond to the following questions related to this important assessment.

Required

a. An important aspect of corporate governance is a company code of ethics. For example, Enron had one of the most complete codes of ethics in corporate America. What evidence would an auditor gather to determine whether a corporate code of ethics is actually being adhered to?

b. Can an auditor make meaningful decisions about areas such as corporate governance where considerable judgment must be applied in making the decision? Are auditors equipped to make subjective judgments of this type?

c. How would an auditor assess the financial competence of an audit committee? What are the implications for accepting an audit engagement if the auditor does not believe the audit committee has sufficient expertise?

d. In what ways is an effective internal audit department a part of good corporate governance? Explain.