
Assurance and other topics discussed by Audit Committees are vital to
investors' understanding of companies - these are particularly relevant to financial reporting and internal control and the Audit Committee Report itself
is a valuable source of information for investors. Given this background the Financial Reporting Council (‘FRC’) has developed a series of ‘conversation starters’ for investors to consider.
The conversation starters are structured by topic and include an initial ‘broad’ question with several more detailed follow-up questions.
Below is a list of some of the conversation starter topics for use by investors wishing to engage with Audit Committees and companies on assurance-related topics. Future areas of focus may include, further ESG-related considerations, approach to materiality, contextualising risk and business model, use of emerging technology and other topical issues as they emerge.
Topics covered include:
- Significant matters
- Effectiveness of the Audit Committee
- Principal risks
- Risks – climate
- Risks – cyber
- Risks – fraud
- Audit effectiveness
- Planning the audit
- Auditor appointment and tendering
- Internal controls/internal audit
To read the detailed questions supporting the ‘conversation starters’ click on this link.