Audit Committee - Role and function within an organization

By: Mohamed Sanih, Gn.Fuvamulah, Maldives 

Dear Readers,

What is the role and function of the Audit Committee within an organization?

The role and function of the Audit Committee can be defined best by the synonym (CLARISSA) from the ACCA P1 Paper: Governance, Risk and Ethics:

The below is an summary transcript of each without an broader definition:

(CLARISSA) 

C: Create a an environment of discipline and control

L: Lend accuracy and truthfulness and credibility in the financial statements.

A: Assisting the Finance Head or Chief Financial Officer in providing a forum of communication.

R: Review and check the financial statements for quality control and accuracy.

I: Independent Review & Judgement

S: Strengthen the position of the Internal Auditor within the company and provide support to their concerns and needs and provide such information to the concerned stakeholders in an transparent manner.

S: Strengthen the position of the External Auditor within the company and provide support to their concerns and needs and provide such information to the concerned stakeholders in an transparent manner.

A: Assist in any disputes between the External Auditors and the Board of Directors and provide solution in relation to such matters.



I am keeping this article short as this will be the first in a series to come in the future.


Sources on Corporate Governance:

https://www.frc.org.uk/Our-Work/Codes-Standards/Corporate-governance/UK-Corporate-Governance-Code.aspx

https://en.wikipedia.org/wiki/Corporate_governance

http://guides.library.harvard.edu/c.php?g=309897&p=2070088

http://ec.europa.eu/justice/civil/company-law/corporate-governance/index_en.htm

http://www.oecd.org/corporate/principles-corporate-governance.htm

https://en.wikipedia.org/wiki/Sarbanes%E2%80%93Oxley_Act