Independent Financial Directors for Audit Committees

In a move to stop the apparent coziness between management and auditors that was seen to be at the root of the Enron, WorldCom and Parmalat scandals, a new code published by the Financial Reporting Council (FRC) states that British audit committees must be willing to challenge management to ensure accurate reporting of the accounting process.

This new corporate governance code gives internal audit committees more power to oversee the accuracy of financial reporting within listed companies, as well as responsibility for monitoring external auditors. The Combined Code, published by the Financial Reporting Council (FRC), states that at least one member of the audit committee must now have "recent and relevant financial experience".

Executives Online has hundreds of interim Finance Directors whose skills and availability are ideal to these newly-required roles on audit committees. More.

Our interim FDs are highly experienced businessmen and women, with proven track records, who do not hesitate to stand up and say when they believe something is wrong for a business. They offer an impartial, independent and experienced eye – something audit committees need to have any credibility with the shareholders and boards of the companies concerned.

The duties of an audit committee extend to monitoring the integrity of a company’s financial statements, review the effectiveness of the company's internal audit function, review and monitor the external auditor's independence and objectivity, among other tasks. More.

Although it is not usually a full time position, membership on an audit committee is increasingly becoming a demanding and time consuming role, especially for larger companies. The FRC’s new code says that audit committee members must be independent non-executive directors, and the chairman of the audited company is ineligible for membership.

Contact us now to find Financial Directors within our network of finance professionals that are particularly suited for audit committee positions.

Why Interims Are Ideal For Audit Committees

Audit committee members need to command the respect of both shareholders and the Board.

This calls for individuals who have commercial acumen, which the Board will rate, and an independent eye, which shareholders will trust.

Experienced, heavyweight interim finance directors are the ideal solution:

Interim finance directors are experts at taking on high-level positions.
They are geared up to work at a high level on a part-time basis.
They quickly get up to speed to address the needs of a business.
They are highly experienced businessmen and women, with proven track records.
They are used to standing up and saying when they think something is wrong for a business.
They offer an impartial, independent and experienced eye.
Interim managers can be flexed up and down. Their time input can be expanded or contracted as and when required.

The Key Duties of the Audit Committee are:

To monitor the integrity of the financial statements of the company, reviewing significant financial reporting judgements.
To review the company's internal financial control system and, unless expressly addressed by a separate board risk committee, the company's internal control and risk management systems.
To monitor and review the effectiveness of the company's internal audit function.
To make recommendations to the board, for it to put to the shareholders for their approval in general meeting, in relation to the appointment of the external auditor and to approve the remuneration and terms of engagement of the external auditor.
To review and monitor the external auditor's independence and objectivity and the effectiveness of the process, taking into consideration relevant UK professional and regulatory requirements.
To develop and implement policy on the engagement of the external auditor to supply non-audit services, taking into account relevant ethical guidance regarding the provision of non-audit services by the external audit firm.
To report to the board, identifying any matters in respect of which it considers that action or improvement is needed and making recommendations as to the steps to be taken.