Directors review of Financial Accounts and External Auditor

Today, the AFR, the Chairman of ASIC, Mr Rod Medcraft made the following comments :

“Mr Medcraft put the onus on directors to contribute to audit quality by ensuring auditors receive reasonable fees and that auditor independence is protected. Price gouging is rampant in the industry, surpassing 2008 levels in the wake of the financial crisis.

(see http://www.afr.com/p/national/boards_must_drill_auditors_asic_8BSbDG724pNPUda4WWbysL – subscription required).

It is important that Directors (often through their Board Audit and Risk Subcommittee) have an active engagement in the tender for External Audit Services, approval of the annual Engagement Letter, review the financial accounts with the External Auditor and finally review their performance.

To assist directors with these processes, we have provided some documents that have been based on various books and material available, please click here to be taken to the page.

An effective external audit process required good and effective oversight by the Directors often through an engaged and active Board Audit (and Risk) Committee.

 

Does Corruption in the Public Sector and Resulting ICAC Investigation Decrease Effective Management?

ICAC released a report into its investigation into corruption by an IT Manager through recruitment at the University of Sydney.  ICAC made 7 recommendations, however a number of them, in my opinion the recommendations are less than optimal.

A full copy of the ICAC report released on 24 October 2012 can be found at http://www.icac.nsw.gov.au/investigations/past-investigations/article/4167.

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Backward Guide on Best Practice for Australian Commonwealth Public Sector Audit Committees

Australian National Audit Office – Public Sector Audit Committees – Independent Assurance and Advice for Chief Executives and Boards – August 2011 – Best Practice Guide.

On 31 August 2011 the Australian National Audit Office (the office of the Australian Commonwealth Auditor-General) released its latest best practice guide for Audit Committees in the Commonwealth Public Sector.

Given the advancement in other public sector jurisdictions in Australia, and significant improvements in the private sector, this is an exceptionally disappointing body of work and may not lead to the improvement in governance in the Australian Commonwealth Public Sector. I am disappointed that the Commonwealth Auditor-General has not provided effective leadership in the Commonwealth in this area. Continue reading

Social Media – Board Perspective

I have noticed an increase in the number of articles that provide information and guidance for Board Members on the use of social media (I admit this may partially reflect my own growing interest).  Some of the discussion has been on how to provide information about ourselves appropriately (and effectively) in the corporate social media space. Continue reading

Boards and Technology

There has been some blog and notes recently around the use of technology in the board room.  Whether to use iPads or other technology to manage and communicate board and committee papers.  Whilst this is a useful development for the efficiency of the board room, I think there are more fundamental issues in relation to technology for boards to consider.

I have had a number of conversations recently in the context of strategic issues that are facing boards and have been surprised that technology has not been on the list. Continue reading