Audit Committee : An Ethical Assessment And Control Environment ( Internal Controls )

898 Words Dec 11th, 2016 4 Pages
Audit committee was a standing committee that oversees key objectives of the company such as financial reporting, internal control, and audits to be in compliance with laws and regulations, and also help set an ethical tone at the top. The committee’s main role was to control and review the company effectiveness. Audit committee included a selective list comprising of three, five or seven directors who were not a part of the company management. Each audit committee should have at least one member as financial expert, as defined by SOX. Audit committee should be composed of entirely independent members of the Board of Directors (members may not accept any consulting, advisory, or fee from the company).
Role of Audit Committee:
1. Risk Assessment and Control Environment (Internal Controls)
Audit committee plays a significant role in the company’s financial integrity for the shareholders. It makes sure that a risk management process was put in place which identifies and manages the company’s risks that includes identification and management of financial risks that can affect its financial reporting. In addition, there were cases where the audit committee had been asked to review the degree of assumed ownership by the management, risk management strategy, and process to address them and their effectiveness. Another key role was to make sure proper control policies were in place to have effective compliance with laws, regulations and operational controls. It makes sure that the…

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