Audit Committee - Responsibilities

Responsibilities

Boards of Directors and their committees rely on management to run the daily operations of the business. The Board's role is better described as oversight or monitoring, rather than execution. Responsibilities of the audit committee typically include:

• Overseeing the financial reporting and disclosure process.
• Monitoring choice of accounting policies and principles.
• Overseeing hiring, performance and independence of the external auditors.
• Oversight of regulatory compliance, ethics, and whistleblower hotlines.
• Monitoring the internal control process.
• Overseeing the performance of the internal audit function.
• Discussing risk management policies and practices with management.

The duties of an audit committee are typically described in a committee charter, often available on the entity's website.

• European Union: Directive 2006/43/EC, article 41.2: (...) the audit committee shall, inter alia: (a) Monitor the financial reporting process; (b) Monitor the effectiveness of the company's internal control, internal audit where applicable, and risk management systems; (c) Monitor the statutory audit of the annual and consolidated accounts; (d) Review and monitor the independence of the statutory auditor or audit firm, and in particular the provision of additional services to the audited entity.
• Public sector: Cf. Standard INTOSAI GOV #9100