Audit and assurance committee handbook

Annex J: Self-assessment checklist

Prompts for self- assessment

Role and remit

Does the committee have written terms of reference?

Do the terms of reference cover the core functions identified in the handbook?

Are the terms of reference approved by the committee and reviewed periodically?

Has the committee been given enough membership, authority and resources to perform its role effectively and independently?

Does the governance statement mention the committee and its purpose?

Does the committee periodically assess its own effectiveness?

Membership, induction and training

Has the membership been formally agreed by the board or AO and has a quorum been set?

Are members appointed for a fixed term?

Does at least one member have a financial background? Are all members, including the Chair, independent of the executive function?

Are new members provided with an appropriate induction?

Has each member formally declared their business interests?

Are members sufficiently independent of other key board committees?

Has the committee considered arrangements for assessing member attendance and performance?

Meetings

Does the committee meet regularly, at least four times a year?

Do the terms of reference set out the frequency and timing of meetings?

Does the committee calendar align with business and financial reporting needs?

Are members attending regularly, and is action taken where attendance is poor?

Does the AO attend meetings or receive a record if not?

Does the committee benefit from attendance by appropriate officials, including internal audit, external audit and finance?

Internal control

Does the committee consider findings from internal audit and others on the effectiveness of risk management, control and governance?

Does the committee consider reviews of the effectiveness of the system of internal control?

Does the committee review the draft governance statement separately from the accounts?

Does it consider how accurate and meaningful the governance statement is?

Does the committee confirm that arrangements for risk management, control and governance operated effectively during the reporting period?

Has the committee considered coordination with other committees responsible for risk and governance?

Has the committee satisfied itself that appropriate arrangements exist to prevent and deal with fraud?

Has the committee been made aware of the role of risk management in preparing the internal audit plan?

Do the terms of reference include oversight of risk management?

Does the committee consider assurances provided by senior staff?

Does it receive stewardship reports from key business areas such as finance, HR and IT?

Financial reporting and regulatory matters

Is the committee’s role in reviewing the annual accounts clearly defined? Does the committee consider the suitability of accounting policies and treatments?

Does it consider major judgements made?

Does it consider large write-offs?

Does it consider changes in accounting treatment?

Does it consider the reasonableness of accounting estimates?

Does it consider the narrative aspects of reporting?

Is there a meeting to receive and discuss the external auditor’s report, including proposed adjustments and issues?

Does the committee review management’s letter of representation?

Does the committee understand management’s process for preparing the annual accounts?

Does it have a mechanism to stay aware of legal and regulatory issues?

Internal audit

Does the Head of Internal Audit attend committee meetings?

Does the committee review the internal audit plan annually and in detail, including coverage of key risks?

Does internal audit have a direct reporting line to the committee if required?

In addition to the annual report, does the committee receive progress reports from internal audit?

Are follow-up audits monitored and is implementation of recommendations reviewed?

Can the Chair hold private discussions with the Head of Internal Audit if needed?

Is there good cooperation between internal and external audit?

Does the committee review whether internal audit has adequate staffing and resources?

Are internal audit performance measures monitored?

Has the committee clarified what information it expects from internal audit? Has the committee reviewed internal audit’s formal terms of reference?

External audit

Does the external audit representative attend committee meetings?

Do the external auditors present and discuss their audit plans and strategy with the committee?

Does the Chair hold periodic private discussions with the external auditor?

Does the committee review the external auditor’s annual report?

Does the committee ensure that actions on external audit recommendations are monitored?

Are reports on external audit work presented to the committee?

Does the committee assess the performance of external audit? Does the committee consider the external audit fee?

Administration

Does the committee have a designated secretariat?

Are agenda papers circulated in advance to allow adequate preparation?

Do reports provide relevant information at the right time and in a useful format?

Does the committee provide guidance on the format and content of papers?

Are minutes prepared and circulated promptly to the right people?

Are matters arising tracked or raised at the next meeting?

Do action points clearly state who is responsible and by when?

Does the committee produce an effective annual report on its activities?

Overall

Does the committee contribute effectively to the organisation’s control environment?

Are there areas where the committee could improve its effectiveness?

Does the committee seek feedback from the Board and AO on its performance?