Audit and Assurance: The Role and Benefits of Audit Committee

AUDIT AND ASSURANCE

TABLE OF CONTENTS
Introduction......................................................................................................................................3
The function, benefits and membership of the Audit Committee...................................................3
The regulation and oversight to ensure the audit firms to conduct work in a better quality...........5
Audit committee role in ensuring that the auditor conduct their work in an effective manner.......5
Conclusion.......................................................................................................................................5
References........................................................................................................................................6

INTRODUCTION
Juvenal is a large firm with more than 3000 employees, the external auditor of the firm
recommended that the firm should conduct audit committee, in this case, Bob was followed to
consider its role, but unfortunately, he was not known about the membership, functions and
benefits of the audit committee. By considering this aspect, the present study is based on the
proper justification of membership, functions and benefits of the audit committee will be
conducted so as to help Bob in getting familiar with the same, and carry on his role smoothly.
The study also covers the regulation and oversight of audit committee to ensure the audit firms to
conduct work in better quality, while considering the role of the audit committee in ensuring that
the auditors conduct their work in an effective manner.
THE FUNCTION, BENEFITS AND MEMBERSHIP OF THE AUDIT
COMMITTEE
An optimal audit committee can offer various benefits to firm which can come in the
form of providing actionable insights to inspect and improvise the financial reporting and
practices, wherein audit committees conduct meeting with the financial officers for maintaining
the efficiency in the controls and outer financial reporting of the organization (Cohen,
Krishnamoorthy & Wright, 2017).
This is highly concerned with the internal reports, financial strategies and operational
issues. In addition, an effective audit committee can help in creating and marinating better anti-
fraud programs in Juvenal, with the conducted insights in terms with the issues of operations and
management, the audit committee has a great role in working with auditors to create and review

the fraud prevention program in organization as a whole while making sure that proper
investigations are taken into account in case the fraud is exposed. This also forms compliance
programs, code of conduct and detailed ethics so that no unethical practices are involved.
Moreover, the audit committee will benefit the Juvenal in enhancing the internal audit function,
by forming an optimal organizational structure that possesses internal auditing team that reports
to the audit committee in a direct manner that makes a contribution to the entire integrity
(Pizzini, Lin & Ziegenfuss, 2014).
By this, the Juvenal firm will be able to satisfy the responsibilities of finance and
compliance while assuring that there is proper adjusting of audit practices and internal controls
accordingly. Along with this, the optimum use of audit committee will ensure oversee of the
external audit of the organization, in which the audit committee has met with the external
auditors to check the services so that there is the maintenance of independence among the
managerial team and external auditors of the firm (Means, 2017). Additionally, an efficient audit
committee can reinforce the credibility with the stakeholders, it aid in communicating about the
independence, trust and relevance, it also promotes confidence.
The audit committee must be primarily based on the UK Corporate governance code and
FRC risk guidance (Icaew, 2018). The membership of audit committee is chosen number of
members of the board of directors of the company, in the Juvenal the Board of Directors is Bob
an expert in Human Resource Management and, as a Non-Executive Director, and Steve, the
Director of Finance, whose roles and responsibilities will be inclusive of assisting auditor in
remaining independent of management. For Bob to interpret the functions of audit committee
effectively, it can be explained that the main function of the audit committee is to conduct audit
overseeing of the books and records of association and to review the internal financial process