Corporate Governance Positions: The Board: 

Audit Committee

 

Audit Committee Independence

Position: All audit committee members should be independent.

Rationale: Independence is needed to prevent insiders from influencing the work and oversight of the committee and the work of the external auditors.

Where stated: CAC - CSA Audit Committees

 

Role of the Board of Directors in the Auditing Process

Position: External auditors should act under the direction of an issuer’s board of directors.

Rationale: While the audit committee is responsible for managing the audit process, the board of directors as a whole is ultimately responsible for the auditors’ performance. This perspective extends the arm of culpability to a range of people whose actions are accountable if the issuer’s financial statements are materially misleading.

Where stated: USAC - Improper Audit Influence

 

Enforcement Powers of the Board Overseeing Auditors

Position: The board must have sufficient powers and resources to take or force action that ensures that the interests of shareowners are protected.

Rationale: Such powers should enable audit committee members to assess accounting issues and practices with the independent auditors without having to be dependent on management for such information.

Where stated: USAC Audit SC - Audit Oversight;  AIMR - NYSE Listing Stds