Role of the Audit Committee

The following article has been re-produced as a means of sharing knowledge and is not specific to Glen Eira Council but is provided for general consideration only.


Audit Committee Oversight

The role of the Audit Committee is as follows:


Internal Audit

• to engage in open and transparent relationship with the Internal Audit provider;
• to review and approve an internal Audit charter annually;
• as a result of communications with the Internal Audit provider, to have a clear understanding of both the strengths and weaknesses of Council's internal controls and risk management systems;
• to ensure that the Internal Audit activity is sufficiently resourced with competent, objective internal Audit professionals to carry out the internal audit plan, which plan has been reviewed and approved by the Audit Committee;
• to ensure that the internal Audit activity is empowered to be independent with appropriate reporting relationships to Executive management and the Audit Committee;
• to address with the Internal Audit provider all issues related to internal Audit independence and activity;
• the Internal Audit activity has in place a Quality Assurance and Improvement program;
• to regularly communicate with the Internal Audit provider about performance and improvement of the services rendered by the Internal Audit provider;
• to ensure that Internal Audit reports are actionable and audit recommendations and/or other improvements are satisfactorily implemented by management;
• to meet periodically with the Internal Audit provider without the presence of management.

External Audit

To provide adequate oversight of external Audit, an Audit Committee should ensure the following:

• The audit firm has a well considered process for establishing independence and this is communicated fully, appropriately and promptly to the Audit Committee;
• Members of the audit team are dedicated industry specialists able to identify important issues in the business and provide value-added service;
• Lead partners and key personnel are visible at the organisation and deliver practicable advice to senior management and the Audit Committee;
• The advice provided by the auditor on regulatory/industry developments and implications is timely, technically robust and commercially sound;
• The audit approach is customised to incorporate the risks of the organisation and the view and concerns of management and the Audit Committee;
• The audit timetable is efficient and well planned;
• The audit approach adds value by explaining the impact of audit findings and results of the auditor's risk assessments;
• Key service performance standards are satisfied, for example response times, deliverables, staff continuity, communications protocols;
• Clear and regular communication is provided by the auditor to the Audit Committee and staff of the organisation as appropriate;
• The fee for the audit represents fair compensation for a comprehensive and high quality audit.