This panel considered the conclusions of the report and discussed how the role has evolved. The session was chaired by ACCIF's Tracy Gordon and speakers were Mary Reilly, NED and Audit Chair, Carolyn Clarke from Brave Within LLP and Ned and Audit Chair, John Hitchins.
The modern audit committee: expanding responsibilities and rising expectations
The role of the audit committee has evolved significantly over the past decade. Once primarily focused on financial reporting and oversight of the external audit, audit committees are now central to broader governance, risk and assurance frameworks.
A clear theme was that audit committees are no longer narrowly financial bodies but now key guardians of organisational trust.
From financial oversight to enterprise assurance
Historically, audit committees were largely concerned with reviewing financial statements and overseeing relationships with external auditors. While these responsibilities remain fundamental, the scope of the role has widened considerably.
Today’s audit committees typically operate across three interconnected areas:
- corporate reporting,
- risk and internal controls,
- audit and assurance.
This broader remit reflects heightened scrutiny from regulators, investors and wider stakeholders following corporate failures, financial crises and rising expectations around transparency. Corporate reporting continues to sit at the heart of the committee’s responsibilities but this now takes a range of formats. Speakers described the annual report as continuing to be one of the primary documents through which companies communicate with stakeholders about performance, risks and governance decisions. However, stakeholders beyond investors are looking at a range of reports and disclosures, Regulation including the Economic Crime and Corporate Transparency Act (ECCTA) requires a broader perspective to be taken.
Audit committees play a critical role in ensuring that disclosures are clear, balanced and focused on material issues (financial and non-financial). This includes challenging management on whether key judgements are explained transparently and whether stakeholders can understand the company’s true position. Speakers noted that maintaining the integrity of the Corporate Report can sometimes require resisting internal pressures to present overly promotional narratives. Ensuring clarity and credibility, rather than marketing appeal, is essential to maintaining trust.
A sharper focus on risk and internal controls
Recent governance developments have placed increasing emphasis on internal controls and risk management. Provision 29 of the UK Corporate Governance Code 2024 came into force in January this year. As a result, audit committees are now expected to demonstrate a deeper understanding of how their organisation manages enterprise risk within defined appetites.
While risk appetite itself remains a board-level responsibility, audit committees play a vital role in overseeing the control frameworks designed to keep organisations operating within those boundaries.
Panellists highlighted that expectations around control effectiveness have increased substantially in recent years. Organisations are now expected not only to operate controls but also to evaluate and evidence their effectiveness more rigorously. A clear example of this is that Provision 29 now requires directors to make a declaration of effectiveness of material controls in the annual report.
Fraud prevention has become a particularly prominent area of focus. Rather than viewing fraud narrowly as financial misstatement, boards are now required to meet the expectations in ECCTA to consider a wider spectrum of risks, including operational, cyber and behavioural threats. One challenge identified was ensuring coordination across multiple risk and assurance functions. Responsibility for fraud prevention or risk monitoring can become fragmented across departments, creating the potential for gaps in oversight. Audit committees are therefore expected to ensure a coherent and joined-up approach.
Internal audit as a strategic partner
Throughout the session, internal audit was repeatedly described as indispensable to effective audit committee oversight. Modern internal audit functions provide insight well beyond financial controls. They offer independent perspectives on operational effectiveness, governance processes and organisational culture.
Speakers observed that internal audit functions have matured significantly over the past two decades. Increasingly, organisations rely on internal audit not only to identify weaknesses but also to provide forward-looking insight into emerging risks and opportunities for improvement. An effective internal audit function, participants suggested, should possess deep organisational knowledge and the confidence to challenge senior management constructively. The ability to discuss behavioural and cultural factors, not just technical findings, is increasingly valued.
Audit committees also have an important role in protecting the independence and psychological safety of internal audit teams. Where auditors feel unable to raise sensitive issues openly, governance effectiveness can be undermined.
The importance of relationships and early engagement
While governance frameworks and technical expertise are essential, speakers emphasised that effective audit committees ultimately depend on strong relationships. Successful audit committee chairs typically maintain regular dialogue with key stakeholders, including chief financial officers, financial controllers, internal audit leaders and external audit partners. These discussions often continue outside formal committee meetings.
Early engagement allows complex issues, particularly judgements around accounting treatments, risk appetite or materiality, to be explored before decisions become time critical. Attempting to resolve disagreements shortly before financial reporting deadlines can create unnecessary tension and risk.
Trust between committee members and management was identified as particularly important. When management understands the committee’s expectations and reasoning, challenges are more likely to be constructive rather than adversarial.
Managing information overload
As audit committee responsibilities have expanded, so too has the volume of information presented to members. Participants acknowledged that excessive documentation could reduce effectiveness rather than improve oversight. Concise reporting was widely viewed as essential. Committee chairs increasingly encourage management to focus on key messages and areas requiring judgement rather than producing lengthy papers covering every detail.
Clear summaries, focused presentations and timely distribution of materials help ensure meetings concentrate on discussion and decision making rather than information processing. There was also recognition that advances in technology and AI may influence how committee members engage with information in future, raising new considerations around confidentiality and data security.
Leadership qualities for effective audit committee chairs
The session explored the characteristics that distinguish effective audit committee leadership.
While financial expertise remains valuable, speakers stressed that technical knowledge alone is insufficient. Successful chairs combine several qualities:
- curiosity and willingness to question assumptions,
- strong preparation and attention to detail,
- clear communication skills,
- the ability to synthesise complex issues,
- sound judgement under pressure.
Preparation was repeatedly highlighted as critical. Effective chairs invest significant time reviewing materials and engaging with stakeholders ahead of meetings, enabling more focused and productive discussions. Importantly, audit committee leaders must also help the wider board understand complex issues. Translating technical matters into accessible insights ensures governance responsibilities remain shared rather than isolated within the committee.
Looking ahead: the audit committee as a trust anchor
As governance expectations continue to evolve, audit committees are becoming increasingly central to organisational resilience. Their role now extends beyond verifying financial accuracy to overseeing the systems, behaviours and controls that underpin organisational credibility.
This expansion reflects a broader shift in corporate governance: stakeholders increasingly expect assurance not only about financial outcomes but also about how companies manage risk, exercise judgement and uphold ethical standards.
In this context, audit committees act as a key anchor of trust within governance structures. By challenging constructively, fostering transparency and supporting strong assurance frameworks, they help ensure organisations remain accountable to investors and society alike.
