This guide aims to help directors – particularly first-time directors – to understand their broad range of responsibilities for governance, reporting and audit and assurance. In particular, this includes their core responsibilities for the statutory financial statements and the audit.
The individual and collective responsibilities of boards and directors are set out in a raft of overlapping and evolving guidance, codes and legislation. In developing this publication, we have sought to signpost and briefly explain the requirements and bring them to life through the eyes of the experienced audit committee chairs and auditors.
The chairs and auditors we interviewed were clear that – while regulatory compliance is a prerequisite – to be successful, boards also need the right culture, to exercise sound judgement and to look beyond immediate pressures to longer-term value creation. They covered red flags and common pitfalls, particularly in building effective relationships with external auditors. They spoke candidly about the importance of constructive challenge, not avoiding difficult conversations or being afraid to ask uncomfortable questions.
This publication covers:
- the basic elements of good governance, and the specific requirements for audit committees, financial reporting, statutory audit and other types of assurance;
- the statutory audit process, dealing with common challenges, how to manage a high-quality audit and what to look for in a lead audit partner; and
- other critical issues directors need to get to grips with including sustainability, cyber security, resilience and internal controls reporting.
The appendices cover questions audit committees might ask themselves, management and the auditors as the external audit progresses. They also highlight the legislation, codes and guidance that underpin the work of directors and auditors; key sections of the statutory audit report and the different types of audit opinions; and sustainability reporting requirements.
This publication seeks to bridge the gap between the regulatory requirements for audit and assurance and the reality of boardroom operations. Whether you are preparing for your first board appointment or seeking to enhance or refresh your role as an established director, we hope that these insights and perspectives will help you serve more effectively in the boardroom.
This publication has been produced by ICAEW with contributions from the Audit Committee Chairs’ Independent Forum (ACCIF). For further ACCIF contributions to ICAEW content please see the following links:
