- Foreword and Introduction
- 1. Introduction
- 2. The Audit Committee’s functions and responsibilities
- 3. Membership of the Audit Committee
- 4. Relationships with key stakeholders
- 5. Conduct of the Audit Committee
- 6. Assessment of the Audit Committee’s performance
- Part 2
- Part 3
PDF of Checklists And Proforma [0.5MB]
Audit Committees have an important role in the governance framework of entities  by providing an independent source of assurance and advice to Chief Executives/Boards. A distinguishing feature of an Audit Committee within an entity's governance framework is its independence and objectivity, as Audit Committees do not undertake management responsibilities and are not a substitute for entity management controls and accountabilities.
Better practice entities recognise the benefits of an Audit Committee with members who have a broad range of skills and experience who can independently review and advise on key aspects of an entity's operations including its: governance arrangements; risk management framework; internal control and compliance frameworks; and financial statement responsibilities.
Recent deficiencies in the delivery of high-profile government programs resulted, in part, from a failure to implement robust fraud control measures early in the life cycle of these programs. This resulted in significant losses and reputational damage from fraudulent behaviour. A sound understanding by senior management of the responsibilities and expectations with regards to fraud control, can help ensure the Australian Public Service (APS) meets community expectations that government services and programs will be delivered with integrity.
This Guide updates and replaces the Australian National Audit Office's (ANAO) 2005 Public Sector Audit Committees Better Practice Guide. While many of the principles and practices remain the same, this Guide incorporates a number of enhancements. These include a discussion on: a committee's responsibilities in relation to risk management and other portfolio entities; the benefits of periodically engaging with the entity Chief Executive/Board, including in relation to the committee's responsibilities for reviewing high risk programs and projects; the qualities of Audit Committee Chairs and members; the establishment of sub-committees; and the benefits of the committee preparing an assurance map to assist in identifying gaps in an entity's assurance framework. The Guide includes a number of new and updated checklists for use by both the committee and entity management.
This Better Practice Guide is intended to complement the Fraud Control Guidelines, and to augment the key fraud control strategies referred to in the Guidelines. While this Guide is an important tool for senior management and those who have direct responsibilities for fraud control, elements of this Guide will be useful to a wider audience, including employees, contractors and service providers. The Guide also takes account of the fact that fraud control arrangements need to be tailored to the individual entity’s circumstances.
The Guide also reflects the requirements of Financial Management and Accountability Regulation 22C, Audit committees that took effect on 1 July 2011.
The aim of the Guide is to provide guidance on the operation of the Audit Committees of public sector entities operating under both the Financial Management and Accountability Act 1997 and the Commonwealth Authorities and Companies Act 1997. As with all of the ANAO's Better Practice Guides, each entity is encouraged to use the Guide to identify, and apply, better practice principles and practices that are tailored to its particular circumstances.
The Guide discusses a range of functions and responsibilities, grouped under nine broad areas, that are appropriate for an Audit Committee. Within this broad set of responsibilities, it is important that each committee, in consultation with the Chief Executive/Board, decide those aspects that the committee will give priority to and particularly focus on.
The Guide is intended as a reference document for Chief Executives, Boards, members of Audit Committees and senior managers with responsibility for Audit Committee activities, and complements the ANAO's Better Practice Guide Public Sector Internal Audit issued in September 2007.
 In this Guide the term ‘entity' applies to all organisations subject to the Financial Management and Accountability Act 1997 and the Commonwealth Authorities and Companies Act 1997
 There is a range of different governance structures within FMA and CAC entities depending upon the entity's particular enabling legislation or other instrument of appointment. For the purpose of this Guide, the term ‘Chief Executive’ is used for entities where responsibility and accountability rests with an individual (such as is the case for most FMA entities). The term ˜Board' is used for those entities where there is a collective responsibility and accountability for the operation of the entity.
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