CIMA Official Learning System P3 — Performance Strategy （4）Corporate Governance and the Audit Committee

L EARNING O UTCOMES
After completing this chapter you should be able to:
? Discuss the principles of good corporate governance particularly as regards the
need for internal controls.
4.1 Introduction
The main purpose of this chapter is to describe the emergence of corporate governance in
the UK (with some international comparisons) and to identify in some detail the princi-
ples of corporate governance based on the Combined Code. The main learning outcome is
contained in Section B of the Performance Strategy syllabus.The role of the audit commit-
tee is described in detail together with its basis in the Combined Code and the Smith and
Higgs Guidance. The role of the audit committee is covered in relation to internal control
and relations with external auditors. It concludes with the emerging area of enterprise gov-
ernance and the benefi ts of corporate governance.