The audit committee is established by the board and its powers are delegated by the board. The board retains responsibility for decisions, performance and outcomes of the audit committee and is therefore continually required to monitor the audit committees’ activities. It is good practice for the audit committee minutes to be circulated to all board members, once approved by the audit committee chair. The audit committee will report to the board on a regular basis.
The roles, composition and necessary powers and responsibilities of the audit committee are set out in its charter. This is one of the recommendations by the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations (ASX Principles).1 As a matter of best practice, the charter will be evaluated (at least) annually to ensure that it is operating effectively and fulfilling its functions. Revisions to the charter, or further training and development for committee members may be necessary as a result of the evaluation.
The audit committee plays a key role in assisting the board to fulfill its oversight responsibilities in areas such as an entity’s financial reporting, internal control systems, risk management systems and the internal and external audit functions.
Downlaod the tool to read more.