The Role of the audit committee Essay Example | Topics and Well Written Essays - 750 words

The Role of the audit committee - Essay ExampleThe paper will debate the roles, the responsibilities and the effectiveness of the audit committee in details. The license of the audit committee and how its independence is ensured will be explored. The current issues that are being faced by the audit committee in the context of mingled accounting misrepresentations will also be analysed. Role of Audit committal The Role of Audit Committee in the US and the UK and Oversight of Internal and External Auditors and Overseeing Financial Reporting The audit committee has the business of judging the validity of financial statements. The immanent financial controls of the company and the companys gamble commission system are reviewed by the audit committee (Financial Reporting Council, 2010). The audit committee is responsible for hiring the away auditors. They have the right to fire the foreign auditors if their performance is not satisfactory. ... The audit committee has the author ity to shoot as well as terminate the self-sufficing auditors. They approve the fees of engaged auditors. They conduct discussion with the independent auditors regarding the approach that will be taken in conducting the audit. They conduct a review of the audit that is do by the independent auditor to understand the areas of concern and name suggestions. They conduct an annual review of the audit report of the independent auditor. The audit committee reviews the companys accounting controls internally along with the risk commission policies of the company. They monitor the financial reporting and financial disclosures in the company. The financial statements that are audited are discussed with the management and the auditors. The audit committee reports regularly to the board of directors regarding their inference from audit reports (Singh, 2005). The audit committee is responsible for ensuring independence of both internal and external auditors. The audit committee has a liais on with internal and external auditors. The external auditors underwrite the validity of accounting information. The audit committee has the responsibility of ensuring the independence of the internal auditors. They provide resources to the internal auditors to ensure quality of the information. The internal auditors report to the audit committee. The compliance with standards and code of ethics of the internal auditors make things easier for the audit committee (The Institute of Internal Auditors, 2004). Importance and Effectiveness of Audit Committees The rising scandals and fraudulence activities in the corporate world have increased the