The audit committee
In this 8-minute lesson, you'll learn what an audit committee is, why it matters for listed companies, and how it functions within corporate governance.
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In this lesson
- 0:00 Audit committee requirements for listed companies
- 1:01 Key roles and responsibilities
- 2:14 Audit committee structure and composition
- 3:05 Advantages of establishing an audit committee
- 4:49 Disadvantages and practical challenges
- 5:30 External auditor communication and oversight
- 6:05 Orange Tech case study and common mistakes
About this lesson
You'll discover the audit committee's core responsibilities—monitoring financial statement integrity, reviewing internal controls and risk management systems, and overseeing external auditor independence—and understand the strict composition requirements set by the UK Corporate Governance Code 2018. The video walks you through the structure (minimum three independent non-executive directors, at least one with financial experience), the advantages of having one (increased confidence in financial reporting, independent scrutiny, cost-effective focus), and practical disadvantages (recruitment costs, potential board tensions). By the end, you'll be able to identify correct and incorrect statements about audit committee roles and composition, preparing you for exam questions on corporate governance and AA paper content.
Duration: 8m
Transcript
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