Audit Committee Obligations
The role of the Audit Committee is one of oversight of the integrity of a company's financial affairs in both the interests of shareholders and on behalf of the Board. This includes everything from the effectiveness of a company's internal control environment to the fair presentation of information in the financial statements.
For listed companies, there is a requirement for an Audit Committee to report to shareholders in the annual report and for unlisted companies, an Audit Committee can ensure best practice is adhered to.
The Audit Committee of the board of directors is responsible for oversight of the financial reporting process, selection of the independent auditor, and the receipt of audit results both internal and external.
In many companies the Audit Committee also deals with risk areas and acts as a governance committee, where increasingly issues are delegated by the Board to subcommittees.
Role of the Audit Committee
- Risk management and internal control environment
- Whistleblowing policies and procedures
- Financial reporting
- Appointment of external auditors
- Audit effectiveness