Board Audit Commiittee

Com.
 Role of The Audit Committe

Function of internal audit :

To obtain authorization

Approval by the enterprises audit committee of the

BOD
 Audit Committee Org. And Charters

Audit committee is an operating component of BOD.

Responsibility :

1. Internal control

2. Financial reporting oversight.

Theres no restrictions, audit committee members should

be independent directors.
 Audit Committee Org. And Charters
(Cont.)
Audit committee members should be independent
directors.

Theres no restrictions,

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 Audit Committee Org. And Charters
(Cont.)
The purpose of a board audit committee charter is to define the
audit committees responsibility regarding :

Indentification, assessment, and management of financial risk

and uncertainties

Cont. Improvement of financial systems

Compliance with legal and regulatory requirements

Qualifications, independence, and performance of independent

outside auditors

Capabilities, resources, and performance of the internal audit

department

Full and open com. with and among the independent

accountants, management, internal auditors, counsel,
employees, the audit committee & the board. 15-5
 Audit Committee Org. And Charters
(Cont.)
Audit Committee charters generally include:

1. Purpose and power of audit committee

2. Audit committee composition

3. Meetings schedule

4. Audit committee procedures

5. Audit committee primary activities

a) Corporate gorvamance
b) Public reporting
c) Independent accountants
d) Audits and accounting
e) Other activities

15-6
 Audit Committee Org. And Charters
(Cont.)
6. Discretionary activities
a) Independent accountants
b) Internal audits
c) Accounting
d) Control and systems
e) Public reporting
f) Compliance oversight responsibilities
g) Risk assessments
h) Financial oversight responsibilities
i) Employee benefit plans investment fiduciary responsibilities

7. Audit committee limitations

 Audit Committees Financial Expert
and Internal Audit
Role:

To assists the BOD in fulfilling its responsibility for oversight of

the quality and integrity of the accounting, auditing & reporting
practices of the company.

The committee reviews and assesses the qualitative aspects of

financial risk, and compliance with significant applicable legal,
ethical, and regulatory requirements.
 Audit Committees Financial Expert
and Internal Audit (Cont.)
Membership:

Consists of at least 3 directors

Independence requirements

No member of the committee may serve on more than 3 audit

committees of publicly trade companies at the same times

Operations :

The committee meets at least 6 times a year

The committee is authorized & empowered to adopt its own

rules of procedure.
 Audit Committees Financial Expert
and Internal Audit (Cont.)
Communication :

The communication wwill include periodic private executive

sessions with each of these parties

Education:

The company responsible to provide the improvement of member.

Authority :

The committee may form and delegate authority to

subcommittees

Responsibilities :

The committees specific resposibilities in carrying out its

oversight role are delineated .
 Audit Committees Resposibilities
a. Appointment of the CAE

b. Approval of internal audit charter

c. Approval of internal audit plans and budgets

d. Audit committtee review and action on significant audit

findings
Example
 Ethics and Whistleblower
Programs

a whistleblower function is a facility an employee or stakeholder

who sees some from of wrongdoing can independently and
anonymously report that action to the enerprise or to regulatory
authorities with no fear of retribution
Example Whistleblower :

Web.
Interna Employee or
l Stakeholder

Internal
Dep. Head
Audit
Thank You