Audit Committees' Informal Interactions Boost Corporate Governance Effectiveness
This paper investigates how audit committees and internal audit functions interact informally outside of their scheduled meetings. By surveying chief audit executives from various UK companies, the study found that such informal interactions supplement their formal meetings and help the audit committees better monitor the internal audit functions. The research revealed that these informal interactions are more likely when audit committees are independent, chaired by someone knowledgeable and experienced, and when internal audit quality is high. Therefore, it shows that aside from official meetings, the informal communication between audit committees and internal audit functions also significantly impacts corporate governance.