Audit Committee and Corporate Governance

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Audit Committee and Corporate Governance
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The European Confederation of Institutes of
Internal Auditing (ECIIA)

• Founded in 1982
• Confederation of 32 countries
• Management Board from 8 countries
• No individual members only countries
• Representing approx. 30,000 internal auditors

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ECIIA Purpose

• To represent internal audit to European Union and
  any other European institutions of influence
• To promote the profession within the wider
  geographic area of Europe and the Mediterranean
  basin

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Monitor the effectiveness of the companys-
internal control,- internal audit where
applicable- risk management systems

• Very broad assignment from risk identification to
  risk management and check of the efficiency of
  the internal control procedures

• Control organisation is complex

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How can the audit committee achieve its
reinforced role ?

• The Audit Committee is ideally placed
• It has free access to any individual,
  information, data
• It can ask for external resources with management
  agreement
• But
• It has limited member resources and time
• It is very difficult to encompass a very large
  organisation

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What are some of the ingredients to be successful
? (1/2)

• Build an Audit Committee with the right profiles
  (skills behaviours) and good understanding of
  the business
• Develop a strong interaction with Internal Audit
• Review carefully the company risk mapping and
  risk assessment
• Get a sense of the risk culture in the field
• Discuss with management out of formal committees

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What are some of the ingredients to be successful
? (2/2)

• Be flexible a yearly approach is out of date
• Require well structured information from the
  company
• Build a network of Audit Committees in large
  organisation to be closer to the business
• Think in term of system, view all the risk
  stakeholders as a combination

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Key points

• Quality of individuals
• Company culture
• Internal audit link
• Control system
• A challenging new posture for Audit Committees