Fundamentals to get right
Principles as a foundation
Before the audit committee gets stuck into any detailed work, there are some fundamentals to get right. Most importantly, audit committees must be fit for purpose. In some of our previous work on audit committees, we identified four principles to use as the foundation for an effective committee. They are:
Making it real and keeping the principles in balance is what will make an audit committee work best.
Fundamental areas of work
From our conversations with those working with audit committees we know that an audit committee being clear about its purpose is very important. Other topics that can be just as important are:
Sometimes, adding value can be as simple as asking a powerful question.
But there are also many tools and techniques that audit committees can use. Here are the ones that experienced people told us were the most useful.
To be able to anticipate opportunities, risks, and other factors that might influence a committee's decision, scanning its environment is important. We often find that although all audit committees intend to do this kind of scanning, more urgent matters tend to come up and scanning moves to the bottom of the agenda.
The section on "Knowing what you don't know" also gives you some useful questions to ask that might help reveal some missing insights.
If you are looking for more information about the current and future environment, here are some links that you might find useful:
- The New Zealand Data Futures Forum is a group of public officials and experts raising questions about the future of data use.
- Thinking Futures has some resources available that will give you a basic knowledge of how to use foresight in organisations, including a presentation on foresight.
- Some global companies have used their reach to better understand global trends that are likely to impact us all. Deloitte's "predicted human resource trends" and PricewaterhouseCooper's "predicted megatrends 2015" make this information accessible.
- We also shared our views on how well the public sector is preparing for the future in our report Reflections from our audits: Our future needs - is the public sector ready?
- risk management;
- "three lines of defence"; and
- effective commonsense tips: setting agendas and quickly fixing control weaknesses.
If you know a particularly useful technique that you think others should know about, tell us in our LinkedIn group.
Some useful guides
We have included a list of links to useful guides that might help you in your work as part of, or with, an audit committee.