Nov 2019 Q3 c.

Audit committees focus on rules and compliance and also to ensure accurate and transparent disclosures. In assisting the board to discharge its responsibility and act with due care, diligence and skill, key functions of the audit committee involve,

• Financial Reporting and Disclosures – The committee must be aware of the financial reporting risks to focus its attention appropriately. This oversight include, reporting of financial information to users of financial reports, application of accounting policies and effective financial management system
• Oversight over System of Internal Control – This includes business policies and practices; protection of company’s assets. Providing assurance and a formal forum for communication between the board of directors and senior financial management on internal control.
• Risk Management System Review– Whilst the company’s system of internal control is designed to help mitigate risk. The audit committee focuses on review of financial reporting, fraud, risk assessment and compliance.
• Culture Compliance – Compliance with applicable laws, regulations, standards and best practice guidelines. The audit committee must recognize how critical the right tone at the top is. The company is required to ensure discipline in the boardroom as well as among employees.
• Oversight of Management and Audit- Facilitating the maintenance of the independence of the external auditor. Facilitating communication between the board of directors and the internal and external auditors; providing a structured reporting line for internal audit and facilitating the independence of the internal auditor (if the entity has an internal audit function). Consideration of significant matters that were raised during the audit process.                                                                                                                                                                                                                                                     (Any 4 points)