Fundamentals of Risk Management

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Risk assurance techniques
403
of the sub-committees. Given this role, the audit committee will retain its position
as the ultimate monitor of governance, risk and compliance throughout the whole 
operation. The audit committee will seek assurance relating to all aspects of the 
strategy, tactics, operations and compliance of the organization.
The outcomes and impact of risk management activities are often reported to
an audit committee in a large organization. Audit committees have a range of
responsibilities, including the obligation to obtain adequate risk assurance in the 
organization. Table 34.1 provides a list of typical responsibilities of the audit com-
mittee. Audit committees should be non-executive bodies that do not have executive 
responsibility for risk management. Similarly, they should not have responsibility
TAbLE 
34.1
Responsibilities of the audit committee
external audit
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recommend the appointment and re-appointment of external auditors
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review the performance and cost-effectiveness of the external auditors
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review the qualification, expertise and independence of external auditors
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review and discuss any reports from the external auditors
internal audit
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review internal audit and its relationship with external auditors
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review and assess the annual internal audit plan
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review promptly all reports from the internal auditors
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review management response to the findings of the internal auditors
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review activities, resources and effectiveness of internal audit
Financial reporting
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review the annual and half-year financial results
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evaluate annual report against requirements of the governance code
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review disclosure by CEO and CFO during certification of annual report