Audit Committee can help a company maintain OBJECTIVITY with regard to financial reporting and the audit of Financial Statements.
Audit committee is the sub committee of the board of directors usually containing a number of non-executive directors. Non-Executive directors are those directors who are not involved in the operations of the Company.
What Does Audit Committee Do?
1. Read and Interpret the financial statements of the company on behalf of Board of Directors, they raise questions which are answered by the management of the company. On the basis of the report the Audit Committee prepares a report raising any ISSUES or making RECOMMENDATIONS to the board in AGM.
2. Audit Committee is responsible for making Strict Internal Controls:
Internal Control is a system by which
the opportunity for fraud is reduced.
management cannot misuse the powers.
prepares cost saving techniques.
3. Audit Committee provides a platform for Finance Manager/Director to express the issues of concern, and which he can use to get things done which might otherwise be difficult.
4. Audit Committee make recommendations to Board of Directors for appointment of next year's Auditors.
Purpose of these Committees?
1.The purpose of these committees is to strength the position of the company .
2.The committee reviews the financial statements on quarterly basis or when ever feasible, and analysis the position of the company, expenditures incurred during that quarter and financial progress and monitor losses etc.
3. Quick control over the financial actions of the company.
Members of Audit Committee!
It is generally observed that the Board Members donot have the sufficient experience/qualification to interpret the financial statements, so it is recommended to appoint only those Directors who have knowledge of Finance/Accounts.
Suggestions/Recommendations/Feedback is highly appreciable.
Drafted by: M. Fahad Mehmood, Assistant Manager Finance, Fisheries Development Board
0 comments:
Post a Comment