Audit Committee Proposals Do Not Go Far Enough - ACT

The Association of Corporate Treasurers said it welcomed the proposed guidance on audit committees issued by the UK Financial Reporting Council’s group chaired by Sir Robert Smith. The association emphasised the importance including risk management in audit committee training, but added that all directors should receive such training. The FRC report recommends that audit committees include appropriate financial expertise where the company’s activities involve specialised financial activities. In addition, said the ACT, ‘there should be experience in the area of corporate finance, financial risk management and treasury operations on the audit committee of all substantial companies’. The association welcome the proposed strengthened relationship between the audit committee and the internal auditor, but warned that this could be greatly devalued without a recommendation that the committee be consulted on the appointment, removal and remuneration and benefits of the internal auditor.

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