This report addresses the establishment and function of an audit committee within a company, particularly focusing on concerns regarding resource allocation to monitoring processes and the tangible benefits derived from these processes. It outlines the objectives of the audit committee, emphasizing communication with internal and external auditors, establishing complaint procedures, and reporting to the Board of Directors. The report recommends terms of reference for the committee, including overseeing financial reporting, approving auditor remuneration, and reviewing financial statements. It identifies the committee's constitution, specifying the need for independent, financially literate members. Finally, it discusses the interaction between the audit committee and both internal and external audit functions, highlighting communication strategies to improve internal control and ensure auditor competence and resource allocation. The report concludes by underscoring the audit committee's importance and the necessity of providing adequate resources for its effective operation.
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