Effective Leadership Crucial for Audit Committee Success

Chairperson Must Possess Courage to Tackle Difficult Issues

A new report has highlighted the importance of effective leadership in ensuring the smooth operation of audit committees. According to the report, the Chairperson of an audit committee must possess certain key qualities, including:

• The courage to raise and tackle difficult issues
• Interpersonal skills
• The ability to build and maintain effective working relationships

These qualities are essential for an audit committee to operate effectively. A Chairperson who is not willing to take on tough issues may struggle to fulfill their duties, while without strong interpersonal skills, a Chairperson may find it difficult to build trust and consensus among committee members.

Secretary Plays Crucial Role in Supporting Audit Committee

The report emphasizes the importance of effective communication between the audit committee and other stakeholders, including government officials and external auditors. It also highlights the crucial role played by the Secretary in assisting the Chairperson in delivering their responsibilities effectively.

• The Secretary is responsible for ensuring that the committee receives information and papers in a timely manner
• Facilitating and coordinating meetings
• Providing ancillary support as needed

Having an officer from the Ministry/Department where the audit committee is set up serving as the Secretary ensures that the committee has access to relevant information and expertise.

Conflict of Interest Policies Must Be Implemented

The report emphasizes the need for audit committees to have clear policies in place for managing conflicts of interest. Each member of the committee must take personal responsibility for declaring any potential situation of conflict of interest that may arise from issues on the agenda or changes in their personal circumstances.

If a Chairperson has a conflict of interest, the Audit Office should appoint another Chairperson. The Secretary should maintain a register of conflicts of interest to prevent any situation where an officer’s personal interest or loyalty could affect their ability to make decisions.

Training and Support Crucial for Effective Audit Committee Operation

The report emphasizes the importance of providing training and support to audit committee members, including:

• Providing guidance on auditing standards
• Risk management
• Internal control systems

Audit committees should also have access to relevant information and expertise. This can include seeking advice from external auditors, government officials, or other experts as needed.

Overall, the report emphasizes the importance of effective leadership, communication, and conflict of interest policies in ensuring the smooth operation of audit committees.