CHAPTER 12 - RISK MANAGEMENT FUNCTIONS OF AUDIT COMMITTEES
23. Functions of the Audit Committee with respect to risk management
(1) The Audit Committee is an independent committee responsible for oversight of the Institution’s control, governance and risk management.
(2) The responsibilities of the Audit Committee with respect to risk management should be formally defined in its charter.
(3) The Audit Committee should provide an independent and objective view of the Institution's risk management effectiveness.
(4) The Audit Committee should be active and posses appropriate management, technical and other expertise, coupled with the mind-set to perform its oversight responsibility.
(5) The Audit Committee must be prepared to scrutinise and question management activities, present alternative views and act in the face of wrongdoing.
(6) Responsibilities of the Audit Committee, where there is a separate Risk Management Committee, should include:
a) reviewing and recommending disclosures on matters of risk in the annual financial statements and annual report;
b) reviewing and providing regular feedback to the Accounting Officer on the adequacy and effectiveness of risk management in the Institution, including recommendations for improvement;
c) ensuring that the Internal Audit and Auditor-General plans are aligned to the risk profile of the Institution;
d) providing oversight over the combined assurance process;
e) reviewing and concurring with the Institution’s risk appetite;
f) receiving and considering reports from the Risk Management Committee;
g) satisfying itself that it has appropriately addressed the following areas, and
i) financial reporting risks, including the risk of fraud;
ii) internal financial controls, and
iii) IT risks as they relate to financial reporting.
h) evaluate the effectiveness of Internal Audit in its responsibilities for risk management.
(5) Where there is no separate Risk Management Committee, the risk management responsibilities of the Audit Committee should be identical to those listed in 24(4).