Course Description
Audit Committees are expected to play a vital role in governance and in building trust in corporate reporting. Audit Committees therefore need members who have appropriate levels of expertise and knowledge of the industry and of the company.
Furthermore audit committees are in best position to offer effective oversight of the performance, independence and objectivity of the auditor and the quality of the audit.
By effectively carrying out its function and responsibilities, the audit committee helps to ensure that management properly develops and adheres to sound system of internal controls that procedures are in place to objectively assess management’s practices and internal controls objectively assess the company’s financial reporting practices.
What Do Participants Learn?
This course will explore the fundamentals of the role of the Audit Committee and the nature and essential qualities of its members, particularly the Audit Committee Chairman. The course will cover the relationships with all key stakeholders and will examine all the key information flows and decision processes.
The course will equip participants with an understanding of the appropriate levels of knowledge and expertise and an awareness of the mechanisms and priorities for audit committees in today’s complex and highly regulated financial services world.
Who Should Attend?
Audit Committee members and those directly involved in supporting and preparing information for Audit Committees.
What Will the Learning Experience Include?
Phase: 1
Introduce
- Comprehensive pre-program activities include:
- Web-based information forms & surveys completed by attendee.
- Direct consultation with the attendee about the expectations.
- During the training, participants engage in data, activities, and conversations that lead to insight and knowledge.
- Participants learn from expert trainers who have both academic and business experiences.
- Highly applicable training content & instructive activities for adding depth to training topics.
- **A half-day site visit for integrating the experience & plan next steps. Opportunities to provide connections, ideas & support.
Phase: 2
Explore & Practice
Phase: 3
Apply
- Apply & sustain the learning experience by using this ongoing support:
- To ensure participant has new skills or behavior progress.
- Optional, fee-based mentoring & coaching with the trainer.
- Training materials & additional documents (e-books, pdf files, presentations and articles)
- Evaluate your training experience by giving us feedbacks and help us to reach our organizational goals.
- Participant's Evaluation
- Trainer's Evaluation
Phase: 4
EVALUATE
Section 1: The Role, Responsibilities and Essentials of of Audit Committee Members
- The role of the Audit Committee as delegated by the board, typical structure, membership, terms of reference and agenda items
- The role of advisors and the role of the Company Secretary
- The provision of information to the Audit Committee
What are the Audit Committee Essentials?
- Oversight of financial reporting, audit quality, and other risks on the committee’s agenda
- Understanding the company, its culture and its dynamics
- Demonstrating sound industry knowledge and access to contacts
- Appropriate relationships with other board members, senior management, internal and external auditors
- Understanding current and emerging issues (e.g. cyber security, emerging technologies and social media)
- Understanding the full range of management information provided to the Audit Committee
- Case study: “Looking at the essential qualities of an Audit Committee member”
Section 2: Overview of the Relationships with Key Stakeholders
The Finance Team
- How to provide effective oversight and challenge to the annual report and accounts
- Dealing with the requirement for the annual report to be ‘fair, balanced and understandable’
- Assessing the new strategic report
- Understanding the Committee’s role in reviewing regulatory returns
- Case study: Understanding the structure of a typical report and accounts, including examples of good and poor annual reports
External Audit
- Roles and responsibilities for external auditors in relation to audit committees
- Assessing external auditor effectiveness
- Governance requirements and the latest guidance from the Financial Reporting Council (FRC)
- Re-tendering the external audit role and evaluating external audit pitches
Section 3: Internal Audits
- Roles and responsibilities for internal auditors in relation to audit committees
- Governance requirements and the UK Financial Services guidance (the “FS Code”)
- Understand the guidance from the Basel Committee on Banking Supervision for assessing the effectiveness of the internal audit function in banks
- Understanding the internal audit universe and the annual risk-based internal audit planning process
- Internal Audit reports, gradings and links to the Board Risk Committee
- Evaluating internal audit effectiveness
Section 4: Audit Committee Activities
Membership and Attendance
- Guidance for nomination committees
- Independence and how this is defined
- Remuneration
- Who should attend and why
- Private meetings
- Importance of papers, minutes, actions and follow-up
- Practical strategies to build your network
- Case study: Assessing some examples of good and poor Audit Committee minutes
Financial Reporting
- Annual report and accounts
- Strategic report and the relationship with the CRO and the board risk committee
- Results announcements
- AGM involvement
Section 5: Guidance on what must be Included in the Audit Committee Report
- A summary of its role
- Members, their qualifications and meetings held
- Significant issues considered in relation to the financial statements
- How they assessed the external auditors’ appointment
- Tenure of the current auditors and time of last tender
- Contractual restrictions on auditor choice
- External audit fees and non-audit services
- Case study: Reviewing examples of good practice Audit Committee reports
Complex Transactions
- Members of committees in financial services companies should have sufficient relevant expertise to understand how complex transactions and financial instruments are recorded and valued
Whistle-blowing
- Relationship with Compliance
- Damage limitation
- Case study: Real life whistle blowing examples and outcomes
Section 6: Audit Committee Effectiveness
- The Role of the Audit Committee Chair
- A balance between teamwork and challenge
- Working with company secretariat
- Setting the agenda and planning the work of the committee
- Time allocation
- Private meetings
- Informal meetings outside committee
- Relationships with the members of the executive management team
- Length of service
- Succession planning
Annual Reviews of External and Internal Audit Effectiveness
- Who performs them?
- Guidance for self-assessment
- Typical areas of concern
Annual Review of Audit Committee effectiveness
- Guidance re self-assessment
- When should there be an independent review
- Typical areas of concern
- Final Discussion and Notes
- Training Evaluation
