||Accountability, in its simplest form, can be described as the requirement to give account of the performance of a duty or competency, entrusted to a person or organisation. This account is given to the principal or employer.
Where there is a distinction between the owners of the funds and the administrators of the funds, there is a need for mechanisms to assure the owners of the funds and the public that the information is accurate and reliable. This requirement is particularly necessary in the case of public listed companies in the private sector, and for elected representatives with a duty of accountability to the public, and to the different operational structures delivering services in the public sector.
Mechanisms that enhance the reliability of information, thereby promoting accountability, are the internal audit function and the audit committee within the reporting entity, and the external auditors, outside the reporting entity. If these mechanisms do not exist, or do not perform effectively and efficiently, the accountability chain is broken and democracy is threatened.