The guide, The Power of Three, put out by the institute’s audit and assurance faculty, sets out principles relevant for both listed companies and other entities, taking into account recommendations made in the Smith Report.
They principles are based around the need for an understanding of the role both sets of auditors play in relation to governance; the need for an overall assurance framework; and the need for continuous evaluation and improvement in the working relationship between auditors and the audit committee.
David Aldous, chair of the institute working party, said: ‘The Smith report recommended that audit committees play an active role in the relationship with internal and external auditors.
‘Increasingly the specific task of monitoring the effectiveness of these relationships will be delegated by the Board to the audit committee, whose members need to understand the differing roles and responsbilities of both sets of auditors’
To order the guide, go to www.icaew.co.uk.
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