The Board of the International Organization of Securities Commissions (IOSCO) has published the IOSCO Report on Good Practices for Audit Committees in Supporting Audit Quality, which seeks to assist audit committees in promoting and supporting audit quality.
According to IOSCO, the quality of a company’s financial report, supported by an independent external audit, is key to market confidence and informed investors, and to the effective functioning of capital markets. While the auditor has primary responsibility for audit quality, the audit committee should promote and support audit quality and thereby contribute to greater confidence in the quality of information in the listed company’s financial reports.
The good practices report can assist audit committees in considering ways in which they may be able to promote and support audit quality.
The report provides good practices that audit committees may consider when:
• recommending the appointment of an auditor;
• assessing potential and continuing auditors;
• setting audit fees;
• facilitating the audit process;
• assessing auditor independence;
• communicating with the auditor; and
• assessing audit quality.
The report sets out good practices regarding the features that an audit committee should have to be more effective in its role, including matters such as the qualifications and experience of audit committee members.
