The Quoted Companies Alliance published its new Audit Committee Guide for Smaller Quoted Companies in February 2009. The guide is intended to provide an overview of the responsibilities that fall to audit committees and their chairmen under the following heads:
- Audit committee membership and organisation – the committee and its members must have sufficient independence, experience, knowledge, skill, time and information so that shareholders will have confidence that they can perform their designated role.
- Oversight of the annual accounts cycle – the committee should conduct a rigorous internal review of the financial statements to ensure that there is adequate disclosure (with appropriate weighting given to the various disclosures) and that the views of the external auditors are taken into account.
- External auditors – the committee has an important role in monitoring the external auditors, particularly in relation to auditor independence.
- Risk management and internal controls – the committee should oversee the process of risk identification and review of internal controls to ensure that risks are being appropriately managed.
The guide is available for purchase from the QCA website (web page).