Question Tag: Audit Report Implementation

i) The Audit Committee is made of five members as follows:

• Three of the members nominated by the Institute of Chartered Accountants, Ghana, and the Internal Audit Agency. These members should be independent of the operation of the covered entity.
• Two members nominated by the Principal Account Holder of the covered entity. These should exclude Principal Account Holder, Deputy Minister, and the Principal Spending Officers.
• The Chairman of the committee shall be selected among the three independent members. The Principal Spending Officer or Principal Account Holder, in consultation with the AC, shall appoint a person to provide secretariat support to the committee.
• The Principal Account Holder shall appoint all the members and the Chairman.

How the structure of the committee could enhance the effectiveness of the committee:

• The structure of AC may improve effectiveness in the following ways:
  • Independent of majority of members, including Chairman will enhance the work of the committee by minimizing the opportunity of influence and likely victimization of outspoken members. This affords the committee free hands to operate.
  • Finance expertise on the Committee is also enhanced as the majority of members are from accounting, finance, and audit backgrounds. This enhances individual effectiveness on the Committee.

ii) Statutory responsibilities:

• The Audit Committee shall ensure that the head of a covered entity pursues the implementation of recommendations contained in internal audit reports, Parliament’s decisions on the Auditor-General’s report, Auditor-General’s Management Letter, and report of an internal monitoring unit in the covered entity particularly, in relation to financial matters raised.
• The Audit Committee shall ensure that the head of a covered entity prepares an annual statement showing the status of implementation of recommendations contained in internal audit reports, Parliament’s decisions on the Auditor-General’s report, Auditor-General’s Management letter, report of internal monitoring unit in the covered entity particularly, in relation to financial matters raised; and any other related directives of Parliament.

Advisory role and responsibilities:

• Providing advice on sound, transparent, and reliable financial management practices.
• Ensuring the risk management process is comprehensive and effective.
• Helping achieve organization-wide strong and effective internal controls in the covered entity.
• Reviewing corporate policies relating to compliance with laws and regulations,
  ethics, conflicts of interest, and investigations of misconduct and fraud.
• Reviewing current and pending corporate governance related litigation or
  regulatory proceedings to which the covered entity is a party.
• Ensuring the internal auditors’ access to the Audit Committee, encouraging
  communication beyond scheduled Committee meetings.
• Reviewing internal audit plans, internal audit charters, risk (including fiscal risk)
  assessment reports.
• Ensuring the development, approval and update of the code of conduct. The
  Committee should also ensure that all employees receive the code of conduct,
  understand it, and obtain appropriate training regarding it.
• Follow up on significant issues, investigations, and disciplinary actions.
• Reviewing audit reports for assurance on efficiency, effectiveness and economy in
  the administration of programmes and operations of the covered entity.

iii) The effectiveness of AC can be enhanced by:

• Offering training for members to equip them with the current knowledge on the working of AC. This will enhance members’ effectiveness.
• Regular review and monitoring of the AC should be carried out by the ICAG and Internal Audit Agency. This will ensure assessment of the AC and those not performing will be worked upon.
• Collaboration with other institutions of accountability such as the Public Accounts
  Committee and Auditor General to promote effective financial governance.