Authors: Andreas Koutoupis, Michail Pazarskis

Title: Internal Audit Activities in the Shipping Sector: The Case of Publicly Listed Shipping Companies in the New York Stock Exchange (NYSE)

Abstract

Internal Audit has evolved as one of the most important functions that aims to ensure the operation of adequate Internal Controls as a mean to minimize the likelihood and / or significance of the relevant risks, as well as to ensure the alignment of company goals and objectives. Internal Audit should ensure and provide objective advise to add value and improve business actions.

The objective of our work is to present the function of Internal Audit according to the main components of an adequate System of Internal Controls (Control Environment, Risk Assessment, Control Activities, Information and Communication and Monitoring).

The research interest of our work focuses on Shipping Companies that are listed on the New York Stock Exchange, as those companies are required by the law to establish and operate Internal Audit Departments.

A primary survey of 116 employees from 7 Shipping Companies (out of a total 14 Listed on the New York Stock Exchange) highlights the encouraging results with respect to the effective functioning of the Internal Audit department. In addition, the existence of an adequate organizational chart, a clear division of tasks and responsibilities and the establishment of a Code of Conduct are important. Finally, information and communication with respect to Internal Audit proves to be very significant, while the level of Risk Assessment and Control activities need improvement.