ACCA F8考试：Audit Committees
1 Introduction
The audit committee is now considered to be an integral element of listed companies with the primary responsibility of overseeing, on behalf of the board, the integrity of the financial reporting controls, risk management and other procedures implemented by management to protect the interests of shareholders and other stakeholders.
The committee should aim to be satisfied that management has properly fulfilled its responsibilities. In doing so, committee members must have a sound understanding of the entity, the way it operates, the environment it operates in and be independent of the company.
The role of the audit committee considers not only the risks and controls over the financial reporting process, but also the tax, environmental, legal and other regulatory matters that have a material effect on the financial statements.
2. Advantages of Audit Committees
Audit committees:
Provide effective and informed oversight in helping to ensure market, public and stakeholder confidence in high-quality financial reporting.
Enable the board to delegate a thorough and detailed review of audit matters, both internal and external, to enhance external confidence in the entity.
Enable non-executive directors to contribute independent judgement on matters of critical importance in running the enterprise (e.g. investment decisions, risk analysis) and play a positive role in areas for which their skills are particularly fitted.
Offer the external and internal auditors a direct, formal link with non-executive directors. Also results in informal communications with the NEDs.
3. Disadvantages of Audit Committees
Audit committees may be seen as an unnecessary legal or regulatory burden placed upon the board: "We know how to run the company without anybody else trying to tell us what to do."
The demands and expectations now placed by, for example, the UK Corporate Governance Code and the Sarbanes-Oxley Act, on the time and expertise of NEDs (who form the audit committee) are such that suitable candidates (e.g. by experience and qualification) are harder to find.
The risks and burden of responsibility placed on audit committee members may result in a sense that the "reward is not worth the effort" or rather that the risks are too high.
This may result in the overall ability of the audit committee being less than what is required.
Audit committees place an additional cost burden on the entity. The advantages offered by having an audit committee must be effectively utilised to ensure appropriate cost benefit (e.g. to enhance public credibility, or to provide an experienced "sounding board" for the executive directors).
Audit committees will only be effective where they are able to operate as intended by the various governance codes.
Anything less than respect and understanding of the role of the audit committee by the main board executive directors, together with unfettered access to all information, will diminish that effectiveness.
