Article:

Audit Committee Requirements Practice Aid

03 February 2017

Audit committees are critical components in the financial reporting chain and committee-work is a year-round commitment. Audit committee duties, responsibilities, and disclosures for public companies are numerous and are governed by regulation and rule-making, U.S. stock exchange listing standards, and evolving corporate governance best practices. BDO has designed a dynamic tool to assist audit committees in fulfilling their obligations and documenting their activities.

The Audit Committee Requirements Practice Aid is available in EXCEL format and is organized by six categories:

  1. Composition
  2. General Responsibilities
  3. Oversight of Risk Management and Financial Reporting
  4. Oversight of Independent Auditors
  5. Oversight of Internal Auditors
  6. Oversight of Compliance, Ethics, and Controls

The tools is comprised of four tabs:

  • Instructions For Use Tab
  • Rules & Regulations Tab - provides a summary by category of the rules, regulations and releases governing specific AC duties, responsibilities and disclosures
  • Practice Aid Tab - aligns the specific audit committee duties, responsibilities and disclosures with suggested timing and status of completion to be used as a guide in conducting periodic audit committee meetings, communicating with the various stakeholders in the financial reporting and audit cycles throughout the year, and in preparing documentation that supports the activities of the audit committee. The Practice Aid may be further customized by adding rows/columns to document additional activities that may be germane to your industry or for which your organization finds benefit.
  • Practice Aid Expanded Tab – as an alternative, this tab can be used instead of the Practice Aid as it combines content from both the Rules & Regulations Tab aligned with related audit committee activities contained within the Practice Aid Tab.
  • Additional Resources Tab – includes related BDO or external resources for your reference within each category.

Note: This practice aid will continue to evolve over time as rule-making, best practices, and resources continue to develop.

We hope you and your fellow audit committee members find this tool useful in aiding you in your oversight of the financial reporting process.