Analysis

Self-Assessment Tools

Audit Committee

As the business and regulatory environment becomes more complex, the asks of the Corporate Boards from their Audit Committees seem to increase manifold. Whether the Audit Committee member is a newly appointed director or a seasoned member of the Boardroom, there are many considerations to keep in mind.

Self-assessment tools help Audit Committee members understand the requirements, identify responsibilities and assess the present status vis-a-vis regulations and good practices; thus helping them discharge their roles effectively.

Creating audit committee charter – A benchmarking tool

The tool examines eight key elements of audit committee responsibility, and identifies practices for each that relate to minimum statutory requirements, current best practices, and current leading-edge practices.

Audit committee meeting agenda builder

This tool is a worksheet that enlists the key responsibilities of the Audit Committee allowing members to determine the frequency of review of each of the items on the basis of criticality/regulatory requirement. Thus, determining whether or not a particular issue is to form part of a particular meeting agenda.

Audit committee effectiveness – Self assessment

The tool is designed in the form of a checklist of Audit Committee functions which have to be rated on a graded scale of perceived effectiveness in the areas of risk management, financial reporting and compliance, internal control environment, and corporate governance.

Specimen audit committee report

As a best practice, the Audit Committee should report its findings to the board, identifying any matters on which it considers that action or improvement is needed, and make recommendations on the steps to be taken. This tool provides a sample of the report that Audit Committees can consider for reporting to the Board.

Sample audit committee charter

This sample audit committee charter was developed from a combination of charters, with the addition of necessary modifications resulting from the Companies Act 1956 and Clause 49 of the Listing Agreement of stock exchanges in India.

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