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Do not expect all the audit committee members to possess sufficient accounting ,audit and risk management knowledge and experience . In a perfect world it would be great if they do ! As we don't live in such a world ,someone should take the initiative to educate them ,and I believe that this " someone " should be the CAE ! During the brief period when I established and managed an internal audit activity for a multi - billion dollar company ,I took it upon myself to keep open communication lines with management in general and the audit committee in particular in order to keep them abreast of developments in areas relevant to their responsibilities .In the case of the audit committee ,I used to share with them news,articles and publications relating to accounting,audit ,risk management ,corporate governance and other areas of interests . And to make things more interesting ,I used to send them a monthly quiz ! I was pleasantly surprised with the positive reaction of the committee members and their desire to receive more information and quizzes ! In fact ,they were competing to score higher points each time I send a new quiz . I am fully aware that not all audit committee members will act in the same way, but the CAE should at least try and fulfil this educational role . It not only benefits the audit committee members and the organization ,but helps to strengthen the CAE's relationship with the audit committee.
Yes, agree with explanation
As a CAE, he can definately share his knowledge and inputs with the audit committee members for them to decide as the final decision maker. he can provide them with his views, but this should not be taken that it is CAE responsibility by any law to educate them.
Unfortunately there are several rules that you have to remember before having any presentation or communication with the Audit Committee:
1. Most of them are not auditors and don't understand "audit terms"
2. They are busy people and only want to know a very high level overview of controls
3. They would like to hear positive things and don't like negativity.
4. their attention only lasts for about five minutes into your speech and then they begin checking stock quotes and text messages. That means that you are done.
5. They feel that they own you and don't like to be quizzed or confronted.
7. They appreciate the form over the matter, so dress sharp and speak flawless language.
Yes the CAE should provide educational support where levels of competence are lacking.
I think above analysis is true and i,m agree with it.
As an audit committee member, it is important to understand the rules relevant to your role. This section provides an overview of an audit committee’s responsibilities in overseeing financial reporting and related internal controls, risk, and ethics and compliance. It also discusses the committee’s role in overseeing the internal and independent auditors, as well as how the committee may interact with other members of management and external stakeholders. Finally, it highlights the committee’s responsibilities with respect to disclosures in the proxy statement.
Ensures that the internal audit goals and objectives are aligned with strategic goals of the organisation.
CAE is appointed by the Audit Committee and it is expected out of CAE to explain the Audit Committee about the new risks and opportunities for the organisation. CAE should also try to educate the Audit Committee to modify the audit plan to address emerging risks faced by the organisation.
Though it is not mentioned anywhere specifically about this educating role, CAE could take this as an opportunity to improve the relationship with the Audit Committee.
In my opinion there should not be any need to 'educate' them; they are the 'audit' committee so one would assume that would have somewhat more than basic knowledge audit. CAE however should update them on latest developments in the profession and any changes that may be required within that organization.
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