Functions of Audit Committee

An audit committee is a committee comprising of non-executive directors which is able to view a company’s affairs in a detached and independent way and collaborate effectively between the main board of directors and the external auditors.

The objectives of the audit committee

• The company should have an audit committee of at least three non-executive directors (or, in the case of smaller companies, two).
• At least one member of the audit committee should have recent and relevant financial experience.
• Increasing public confidence in the credibility and objectivity of published financial information (including unaudited interim statements).
• Assisting directors (particularly executive directors) in meeting their responsibilities in respect of financial reporting.
• Strengthening the independent position of a company’s external auditor by providing an additional channel of communication.

Functions of Audit Committee

• Monitoring the integrity of the financial statements.
• Reviewing the company’s internal financial controls.
• Monitoring and reviewing the effectiveness of the internal audit functions.
• Making recommendations in relation to the appointment and removal of the external auditors and their remuneration.
• Reviewing and monitoring the external auditor’s independence and objectivity and the effectiveness of the audit process.
• Developing and implementing policy on the engagement of the external auditor to supply non-audit services.
• Reviewing arrangements for confidential reporting by employees and investigation of possible improprieties.