Need Help....02 questions — OpenTuition Forums

SSatesh16y ago

Question # 1
Given below is one of the principles of the Combined Code of Corporate Governance,
"The board should establish formal and transparent arrangements for considering how they should apply the financial reporting and internal control principles for maintaining an appropriate relationship with the COMPANY'S AUDITORS".

Please guide me whether in the above sentence, the COMPANY'S AUDITORS refer to:
1- Internal Auditors
2- External Auditors
3- Both 1 and 2

Question # 2
In the case of a public listed company, who is at the top most position, or who is the person to whom the Audit Committee should report to?
Managing Director or The Chairman.

Former user16y ago#1

hi,
1. company's auditor allways refers to external aiditor
2. audit committee is allways directly responsible to the board of directors, not executive directors, becoz ED-s prepare financial statement

hope that will help

SSatesh16y ago#2

thanx
but external auditor are not the employees of the company so how they can be referred to as Company's auditor..... and BODs are also responsible for the preparation of financial statements not only MD.. so...me still confused

Former user16y ago#3

hi,

1. As regard to company auditor refer to glossary of audit terms of IFAC IAASB handbook, company auditor is specific term, which indicates that an auditor is the auditor of any client, company.

2. Corporate governance principles mentioned in f8 are based on combined code of UK. according to the code there are two tier system in corporate governance:

1. board of directors (executive directors) - prepares financial statements
2. supervisory board - supervises board of directors. in supervisory board we have several subcommittees: audit committee, nomination committee, remuneration committees etc. majority of these directors should be non executive, in order to preserve non biased evaluation of the work done by executives in the company.

Now, internal auditors are directly accountable to audit committes (subcommittes of supervisory board). external auditors allways use audit committe as a platform in relationship with board of directors, this is like formal chat between them.

Now should be clear,

my tip, google combined code and IAASB handbook and READ them.

SSatesh16y ago#4

hey,
thanks
this was really helpful. thanku very much

Former user16y ago#5

I want to be continued as a member of the OT.

Thanks,

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