The Role of Modern Internal Auditing and Corporate Governance in Turkey: A Sound Comparison with the Global Internal Auditing Standards and A Benchmark Analysis on Companies with Corporate Governance Rating Scores That Listed in Istanbul Stock Exchange Corporate Governance index (CGI)

ABSTRACT
Corporate govemance index (CGI) is a quite new concept in Turkey. As a promising emerging country and a candidate for EU accession, Turkey needs both structural changes and an ongoing development and harmonization of its capital market legislation. Hence, the use of corporate govemance (CG) framework and the modem intemal auditing techniques could enable Turkey not only to manage its own risks better but also to increase the market’s confidence in its commitment to sound fiscal and monetary policies. In this paper, we analyze the listed companies’ corporate govemance and internal auditing performance metrics which have gained the relevant rating scores based on the Corporate Govemance Principals of Turkey. This rating reflects a good overall performance of the company regarding its current corporate govemance structures as measured against the Principles of the Turkish Capital Markets Board (CMB). In this way, we aim to increase the awareness on the importance of corporate govemance framework, CG issues and the benefits of relying on modem intemal auditing techniques to achieve strategic goals for Turkish companies in the future. We also intend to contribute the improvement in these fields of work. Corporate govemance index (CGI) is a quite new concept in Turkey and unfortunately the number of companies at GCI is surprisingly low as compared to the number of listed companies at İstanbul Stock Exchange (İSE), i.e. 319. There are only 18 listed companies accepted to this index. For this reason, we could not apply any econometric analysis with such a limited of samples in our hands rather; we could only be able to use descriptive analysis. But, to our knowledge, this is the first study using the data of the companies listed in İstanbul Stock Exchange Corporate Govemance Index (CGI) in Turkey in connection with the related variables. Due to data constraints we prefer the non-financial companies which have corporate govemance ratings to make a sound comparison with the Institute of Internal Auditors (IIA) standards and intemational benchmarking for Turkey. We use the listed company data which is publicly available and make a benchmark analysis intemationally as the methodology by comparing the results with the IIA Standards and Corporate Govemance Principals. Based on the findings, we make some relevant policy recommendations for future developments in Turkey.