An Audit and Risk Assessment Committee is an integral component of corporate governance within an organization. This committee is typically formed by the members of the organization's board of directors and is responsible for overseeing and evaluating the internal controls, financial reporting, risk management processes, and the overall effectiveness of the organization's audit activities.
The primary objective of an Audit and Risk Assessment Committee is to provide an independent and objective assessment of the organization's risks, control systems, and financial reporting processes. This includes reviewing the financial statements, internal audit reports, compliance with legal and regulatory requirements, and assessing the adequacy and effectiveness of the organization's risk management practices.
The committee ensures that proper risk mitigation measures are in place, including identifying potential risks, evaluating their impact on the organization, and recommending appropriate risk management strategies. It reviews the effectiveness of the internal control systems to safeguard the organization's assets and ensure compliance with relevant laws and regulations.
The committee liaises with both the internal and external auditors to ensure that audits are conducted in accordance with applicable auditing standards. It also provides a platform for effective communication between management, the board of directors, and the auditors.
Overall, the Audit and Risk Assessment Committee plays a crucial role in promoting transparency, accountability, and effective risk management within an organization. It enhances stakeholders' confidence by providing assurance that the organization's financial statements are fairly presented, its risks are appropriately managed, and its operations are conducted in line with legal and regulatory requirements.
