Assessment of audit committees

Audit Committee Institute Assessment of audit committees KPMG’s AUDIT COMMITTEE INSTITUTE In addition to reviewing its terms of reference, audit committee members should also review the effectiveness of the audit committee annually. A suggested framework for such a review – an audit committee self assessment – is set out in this publication. It is intended that each audit committee member will complete this self-assessment questionnaire independently. The audit committee chairman or an external facilitator should, after collating the responses, lead a discussion on the key points arising from the questionnaire and feedback any matters of interest - focusing on those areas which clearly need improvement or where there is great variation in answers. When using a facilitator, care needs to be taken if the individual is in some way conflicted due to the closeness of their relationship with the audit committee. The assessment exercise could be carried out at a special meeting of the audit committee or at some form of ‘away-day’. The results of the self-assessment and any action plans arising should be reported to the board body after discussion with the chairman of the board. Audit committee chairmen may wish to tailor this checklist to the specific circumstances of their committee and organisation - giving more weight to some aspects of the self-assessment than others. Appropriate weighting will be influenced by a ...