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As the meaning of reform in a system, these reforms in corporate governance would make effective impacts over the process of audit in the context of auditor requirements and the clients understandings. The appointment of new directors to serve the organization independently would also enhance the organizational functions in a positive way that reduce the root of the conflicts. It also fulfils the entire requirements that retains the entire aspects of the corporate governance. It also helps make the most effective and positive relationship between the organizational management people with the auditors. This situation enhances the understanding of auditors about the client. The other reforms as like in the form of board member, the half board member would also increases the transparency factors that restricts the other members of the board to make any internal fault for making their own profits (Business Insider, Inc., 2013). It also influences the performance of the auditor related to make huge checking about the financial transaction with the company.
This situation also fulfils the requirement of the auditor related to the use of fair transactions policy that enhance the trust of the shareholders in the organization. On the other hand, in some organizations, the shareholders of the company are also a part of the organizational management that may increase the condition of unfairness that could make the negative image of the organization in the mind of auditors (Business Insider, Inc, 2013). Hence, it is the requirement of the auditor to find out the role of each stakeholder in the organizational decisions. At the same time, the appointment of independent directors will also reduce the biases in decisions that provide the information to the auditors related to the transparency. It also affects the understanding of auditors in positive ways in the context of clients.
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