Audit Committees

Q1. What is an audit committee?

An audit committee is an operating committee of a selected number of the company 's board of directors with the required level of independence to be able to contribute effectively to the committee's oversight function.  

Q2. What responsibilities have the audit committee?

 Generally, the audit committee's responsibilities will include:-

      • inform the board of directors how the statutory audit contributed to the integrity of financial reporting and the audit committee's role in that process;
      • monitor the company's financial reporting process;
      • monitor the effectiveness of the company's systems of internal control, internal audit and risk management;
      • monitor the company's statutory financial statements; and
      • monitor and review the independence of statutory auditor for other services provided to the company.




Q3. What companies must have audit committees?

All Public Limited Companies (PLC's) as well as "public interest entities" must set up an audit committee.  Public interest entities are; companies with shares quoted on a stock exchange, banks and certain other credit institutions and insurance companies.

The board of directors of other large company can decide whether or not to establish an audit committee.  However, they must report their decision and the reason for that decision in the company's financial statements.

Section 167 of the Companies Act 2014 sets out the requirements for Irish registered companies and in addition Regulation 115 of Statutory Instrument No. 312 of 2016 set out the requirements for "public interest entities".




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