Caroline Mawhood

External Member of the

Audit Progress Committee
The role of the audit committees in
bringing added value to Internal Audit
IAS Conference 2014 - Adding value through Internal Audit
1
Experience as External Member
Corporation of London: local authority
Department of Energy and Climate
Change: government department
Nuclear Decommissioning Authority:
independent authority
Debt Management Office: UK Agency
Audit Progress Committee
2
1. The Role of Audit Committees
Why?
Who?
What?
When ?
2. The Added Value of Audit Committees
Generally
To Internal Audit
The role of Audit Committees in providing
added value
3
cipfa.org
Why have an Audit Committee?
To: Provide assurance on an organisations
financial management, control and risk
Improve accountability
Provide focus on governance, risk management and
good financial controls
Provide specialist consideration of audit matters
Bring independence and scrutiny to Internal and
External Audit Work
APC Purpose: Similar but emphasis on Internal Audit
and controls in Directorate Generals
4
cipfa.org
Who is involved in Audit Committees?
All have non-executive/external members but
structures are different
UK Government Departments: 3 to 4 external
members with one as the chair who sits on main
Board
Corporation of London: 7 elected members, one of
whom is Chair and all sit on main Council plus 2
external members
Audit Progress Committee: 7 Commissioners plus 2
external members
5
cipfa.org
What does the Audit Committee do?
Approve the Internal Audit Plan
Approve the Internal Audit Budget and Resource Plan
Receive reports on progress from Chief Internal
Auditor including performance measures
Approve decisions on appointment of Chief Internal
Audit Executive
Review and advise on Internal Audit reports
Review the key risks and risk assessment process
Approve external audit plan
Review external audit findings
6
cipfa.org
Performance Measures for
Internal Audit: Examples
% of Audit Plan completed: Target 90%
% of Recommendations fully implemented: Target
75%
Timely Production of Draft Report: Target 80%
Timely agreement and issue of Draft Reports: Target
80%
Customer Satisfaction: Target 90%
% of Audit Staff with professional qualification:
Target 75%
Plus: Peer Review and Benchmarking
7
cipfa.org
7 Commissioners and chaired by one of the
Commissioners
2 external members with financial management and
audit expertise
Scrutinise and endorse the Internal Audit Plan
Review the content, validity and clarity of Internal
Audit reports
Follow up implementation of recommendations
Summary of Audit Progress Committee
8
cipfa.org
When do Audit Committees work?
For committees there is variation
Debt Management Office 4 times a year quarterly
Department of Energy and Climate Change and
Corporation of London: 6 times a year and 2 close
together for accounts review
Audit Progress Committee:
-4 Main Meetings a year
-2-3 Preparatory meetings per main meeting
9
cipfa.org
What is the added
value of Audit
Committees?
10
cipfa.org
Oversee its independence
Support effectiveness of the Internal Audit Process
Promote effective use of internal audit in the assurance
framework
Provide forum for open debate and mature questioning
Demonstrate its standing in the organisation
What is the added value of Audit
Committees for Internal Audit?
11
cipfa.org
To ensure that
Internal Audit has the necessary support in the
Commission
Auditee takes the audit findings seriously
Auditee provides appropriate action plan
Auditee follows up recommendations
The Committee provides an important link with the
Commission itself
What is the added value of APC
for Internal Audit?
12