Talk:Audit Committee

Name

The name is misleading (as stated). How about "The Internal Audit Committee"? Gordo (talk) 08:13, 12 November 2012 (UTC)

That doesn't make any difference. The potentially confusing bit is the audit part, not whether it's internal or external. As a committee, it already indicate that it's internal. KTC (talk) 08:41, 12 November 2012 (UTC)

If someone can think of a better name, I'm happy to change it. "Committee of internal affairs"? "Internal review committee"? --Tango (talk) 13:11, 12 November 2012 (UTC)

Need for audit?

B3. Should a charity have an internal audit function or audit committee?

Found at http://www.charitycommission.gov.uk/publications/cc8.aspx. The management of risk is an important part of the audit function, both financial and non-financial risk. Gordo (talk) 08:18, 12 November 2012 (UTC)

The link provide a good definition of an audit committee in the accounting sense, but that's not what Tango is proposing. KTC (talk) 08:43, 12 November 2012 (UTC)

Yes, I see. I had in mind this section. Gordo (talk) 09:26, 12 November 2012 (UTC)

 The internal auditor usually reports directly to the trustees
or an audit committee set up by the trustees. Internal auditors
look at all the risks facing an organisation and what is being
done to manage those risks. An internal auditor might look at
reputational risk, operational risk or strategic risk.

Internal and External Auditors.

I believe it is good governance in general to appoint distinct companies for audit. For example, Deloitte for internal audit and KPMG for external audit. Gordo (talk) 09:24, 12 November 2012 (UTC)

Can you elaborate on that? What is the distinction? I've never heard of a firm with two auditors... If there is a problem, then you might bring in a second firm to do a one off review, but I've never heard of any kind of routine thing like that. --Tango (talk) 13:07, 12 November 2012 (UTC)

I have an example Poplar HARCA Gordo (talk) 16:06, 12 November 2012 (UTC)

See also http://www.thirdsector.co.uk/news/886192/ Gordo (talk) 15:08, 12 November 2012 (UTC)

The internal auditor's role is determined by the charity's management
and trustees, and will inevitably focus not only on finance, but also
on matters such as operational effectiveness, measurement of impact and
strategic planning. The main concern of the external auditor is to ensure
that a charity's financial statements are free from material misstatements
and to provide a true and fair opinion in their report.

Thank you for clarifying that. So, an internal auditor is basically a governance consultant. I don't think it would be cost-effective for an organisation the size of WMUK to go down that route. Getting governance expertise through trustee training is probably a better approach, and possibly bringing consultants for specific projects. (The current governance review is very similar to this, except for being a one-off review because of a specific problem - I don't think we need anything like that on an ongoing basis.) None of this has much to do with my proposal though - probably an argument for changing the name... --Tango (talk) 17:30, 12 November 2012 (UTC)

That's not how I would summarise the standard function of internal auditors. For a start, while some internal auditors are indeed contracted with an external firm, it's often that they are employees of the company. Have a look at Chartered Institute of Internal Auditors explanation - What is internal audit? -- KTC (talk) 18:21, 12 November 2012 (UTC)

That makes it sound like another name for w:Enterprise Risk Management. --Tango (talk) 18:35, 12 November 2012 (UTC)