Review establishment of audit committee & its structure
i. Review the Audit Committee Charter and using the background and permanent information for the Audit Client, document the answers to the following questions:
1. Is ReAL Co required to establish an audit committee?
2. Under ASX recommendations for listed companies, the audit committee should be structured so that it
- has at least three members, all of whom are non-executive directors and a majority of whom are independent directors
- is chaired by an independent director, who is not the chair of the board of directors.
Has ReAL Co complied with these recommendations?
3. What are the qualifications and experience of the members of the audit committee?
4. How often is the audit committee required to meet over the reporting period?
5. Does the audit committee make recommendations on whether the financial statements reflect a true and fair view of the financial position and performance of the entity?
6. Does the committee recommend the appointment or removal of the internal and external auditors?
7. Does the committee review the scope and adequacy of the internal audit work plan?
8. Does the committee review the independence and performance of the external auditor?
9. Does the committee review any proposal for the external auditor to provide non-audit services and whether it might compromise the independence of the external auditor?
ii. Select the information you feel is relevant to include as permanent information in the electronic workpapers. Record it in the workpaper where permanent information can be kept.
iii. Draw an overall conclusion on the adequacy of the Audit Committee’s structure
Permanent File Information: