The audit committee oversees the company’s risks, internal controls and annual reports, and assess the assurance in place for each of these on behalf of the board and the shareholders. The audit committee therefore has a key role and a critical position within the audit committee is the audit committee chair.

Chartered Accountants, particularly those who have had an executive position as a finance director, are ideally placed to be audit committee chairs. They have the financial knowledge, the experience of financial and broader corporate reporting, and understanding of audit, both internal and external to be able to lead audit committee discussions.

In 2012, Chartered Accountants ANZ (then ICAA), the UK FRC and the Institute of Chartered Accountants of Scotland (ICAS) published “Walk the Line” which provided insights from a series of interviews with audit committee chairs in the UK and Australia at that time. Much of the 2012 report remains valid, but the new report “Steadying the Tiller” builds on it by adding new insights and commentary on the more recent developments and the emerging challenges facing audit committees as well as incorporating the views of New Zealand audit committee chairs for the first time.

“The audit committee has a key role in ensuring the quality of the annual report and making sure that it is underpinned by the necessary assurance.” 

The current project commenced in the aftermath of the BHS and Carillion collapses in the UK, when renewed attention was being focused on the role of auditors and on the behavior of boards and audit committees in the context of business viability. In Australia and New Zealand there has also been increased focus on corporate governance and audit.

The audit committee has a key role in ensuring the quality of the annual report and making sure it is underpinned by the necessary assurance. The committee is critical in appointing the right external auditors capable of undertaking a thorough, challenging and comprehensive audit. It also liaises with the auditor in the audit planning, development and execution to ensure there is sufficient scepticism and challenge, and that it results in a high-quality audit which provides value to the users of the annual report.

ICAS and CA ANZ hope this report will be of benefit to their members who act as audit committee chairs, through the sharing of perspectives and best practice. It should also contribute to the resilience of the business sector and the effectiveness of corporate governance in the UK, Australia, New Zealand and in other jurisdictions across the world.