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Directors are responsible for implementing and monitoring the company’s system of internal control. An annual assessment of internal control should be conducted to confirm that the board had considered all significant aspects of the internal control. The directors should report on its review as part of the annual report.
The above statement from BPP’s revision kit.
But im not sure the “Director” here is referred to Audit committee (NED) or Internal audit director.
Need your advise to clear my doubt.Most companies have a “board of directors” – this is an executive board. Committees with NEDs are a “comply or explain” listing requirement and best practice for non-listed companies – but they would have to be quite sizeable and with a variety of stakeholders to be worth the effort.
The “annual report” is what it says – it includes the annual financial statements and, where relevant, independent auditor’s report and “other information” (e.g. directors’ report, chairman’s statement).
The annual report is therefore “the place” most suitable for the various committees – audit/nomination/remuneration/risk – to make their reports (e.g. as described in the UK Code).
For listed companies, an audit committee, in the absence of a separate risk committee is responsible for REVIEWING the company’s internal financial controls and internal
control and risk management systems – but responsibility for the suitability and effectiveness of those systems remains with the executive. Remember that committees assist the board in discharging its duties.
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