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Audit committees

Practical information and guidance for Corporate Governance professionals working on audit committees.

In this section

How do you know if your audit committee is effective

Audit Committees are playing an increasingly critical corporate governance role in terms of their leadership on financial reporting, internal controls, risk management and the internal and external audit functions.

Smaller Listed and AIM Quoted Companies

Designed to give investors, and other users, the ability to assess the financial integrity of a company, financial reporting and compliance with relevant reporting frameworks is an essential tool for holding management to account. More than this, high quality financial reporting can contribute to a strong and efficient economy by improving transparency and liquidity and thereby lowering the cost of capital.

9 Traits of an effective Audit Committee

Having an effective Audit Committee is essential for good corporate governance as it leads on financial reporting, internal controls, risk management and external audit functions.

Enhancing audit-audit committee dialogue

ICAEW’s Financial Services Faculty has issued guidance to enhance the dialogue between bank auditors and their audit committees.

Audit committee pre-approval of non-audit services

Helpsheet explaining how audit committees should assess whether their policy for pre-approval of non-audit services (NAS) complies with the FRC revised Guidance on Audit Committees, given in the FRC Ethical Standard (2016).

Assurance mapping

Assurance maps can be a powerful tool providing great insights for boards, senior management and audit committees. Here the Audit and Assurance Faculty explores the concept of assurance maps and the benefits to various stakeholders.

Making a difference: Audit committees in central and eastern Europe

Based on in-depth interviews with audit committee members in seven CEE countries, this report draws out insights on how audit committees are working, how they are having an impact and how they view the future. It provides insights into some of the common challenges still remaining at a time when the role of audit committees is expanding, largely driven by the introduction of new statutory requirements

The impact of IFRS 16 for different retail audiences

IFRS 16 presents key challenges and considerations for management, boards and audit committees as well as external users of accounts. Here are the implications for each of these audiences.

Enhancing the dialogue between bank auditors and audit committees: Good practice for bank auditors, audit committees and executive management

The ICAEW published the report Audit of banks: lessons from the crisis in June 2010 and committed to produce good practice guidance to enhance the dialogue between bank auditors and their audit committees. This report sets out that guidance. It considers ‘dialogue’ in its broadest sense, covering the fundamentals of a good auditor/audit committee relationship, the structuring of meetings throughout the audit cycle, and the content and style of reporting to the audit committee.

Webinars and other recordings

Leading an effective audit committee

Angela Crawford-Ingle, Chair of Audit & Risk Committees at Beazley plc, Swinton Insurance and River and Mercantile Group, and Tim Copnell, Founding Chairman of KPMG’s UK Audit Committee Institute share best practice in leading an effective Audit Committee.

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The board structure and its committees

Chapter 3 deals with the structure of the board, its governance role and responsibilities. It also gives brief overviews of the different types of board committees, including: audit; nomination; remuneration; and risk committees. These are dealt with in more detail in later chapters.

Audits, accounts and financial statements

Chapter 7 gives details of the purpose of audit and the auditor's duty of care. The role of the audit committee is dealt with in detail, including audit tendering and internal control and risk management.

Audit

An authoritative guide to company secretarial practice. Detailed commentary is accompanied by over 80 precedents. Chapter 11 of the handbook looks at audit, including choice of auditor, audit rotation, audit committees and reports to the audit committee.

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Board problems: with stakeholders’ growing emphasis on corporate culture, boards could benefit from ethics expertise

The author asks whether companies need more ethics and compliance officers on board audit committees if better ethics and moral responsibility are required by society

Security, resilience require better questions

The article offers suggestions for increasing corporate cybersecurity efforts for the board. Topics discussed include ineffectiveness of artificial intelligence in preventing cybercrime and data security failures; making sustainable data privacy compliance; and verifying identities and providing access to resources through authentication.

How to build a cyber-capable board

The article offers several tips for businesses to create a board of directors that can help manage cybersecurity risks. These tips include consulting both the board and chief information security officers on cybersecurity issues, demanding clarity in security reporting, and focusing on the human aspects of cyber risk.

Good times and bad: The trauma of the financial crisis needs to be remembered even as new threats become a growing concern.

The article focuses on the risk management by the financial services industry in the United States. The industry faces various challenges that include non-financial risks like cybersecurity, model, third-party and also economic risks. Many companies now have a risk committee of the board with primary responsibility for risk oversight

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Harnessing the power of internal audit

This IIA guidance is designed to help the audit committee and other stakeholders to harness the power of internal audit for the good of their organisations.

Governing culture: practical considerations for the board and its committees

11 page paper from EY that looks into the role of boards and committees in governing culture. Separate sections look at the Nomination Committee, Remuneration Committee and Audit Committee and give questions on culture for each committees' reflection, as well as the board itself.

Revised guidance on the strategic report

The 2018 Guidance has been enhanced to recognise the increasing importance of non-financial reporting while maintaining the key principles of existing guidance. The FRC believes that the integration of non-financial information into the strategic report is a key part of telling a company’s story

Audit, risk and internal control

The FRC published the revised Guidance for board effectiveness in July 2018. Section 4 Audit, risk and internal control look as the audit committee's (or risk committee's if separate) responsibility in this area.

Audit committee brief

Monthly newsletter from Deloitte's (US) Center for Board Effectiveness that 'provides audit committee members with recommendations, overviews of corporate governance resources, regulatory and legislative environment outlooks, and technical updates'.

Internal audit 3.0 - the future is now

In this report, Deloitte outlines its blueprint for "Internal Audit 3.0" - the next generation of internal audit. The report draws upon the experiences of audit committee chairs, executives and business leaders, to try and clarify the expectations of those involved in audit, along with the necessary skills and enablers to deliver those expectations.

Brexit: Financial reporting implications

Two page briefing from the Audit Committee Institute (KPMG) highlighting the immediate accounting and reporting implications to consider when preparing half-yearly and annual financial reports.

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