In this paper, we shall discuss the impact of Audit Committee on internal audit in Nigeria Banks with a case study of Wema Bank plc. However, a literature review of framework, composition, terms of reference, functions, responsibilities, and challenges of Audit committee and the Development of corporate governance provisions relating to audit committees as well as internal audit and control concepts shall be examined. In essence, the primary source of data collection shall be secondary data out of which we shall draw the significant impact of audit committee on internal audit and control in Nigerian banks.
In accordance with the Company and allied Matters Act 1990 (as amended), Section 359(2) provides that in addition to the report made to the members of the company on its accounts, the auditors shall in case of a public company also make reports to an audit committee which shall be established by the public company. Audit committee is new in company management. In Nigeria, it is the company and allied matters Act, 1990 that has made such committee mandatory by virtue of section 359(3).
The principal duty of the committee is to examine the auditor’s report and make recommendations thereon to the annual general meetings as it may think fit by virtue of section 359 (4). Section 359(6) set out more clearly the objectives and functions of the audit committee as follows;
- Ascertain whether the accounting and reporting policies of the company is in accordance with legal requirements and agreed ethical practices;
- Review the scope and planning of the audit requirements;
- Review the findings on management matters in conjunction with external auditor and departmental response thereon;
- Keep under review the effectiveness of the company’s systems of accounting and internal control;
- Make recommendations to the board as regards the auditors of the company; and
- Authorize the internal auditor to carryout investigation into any activities of the company which may be of interest or concern to the committee.
However, the audit committee should not be set as a barrier between the auditors and the executive directors on the board or encourage the board to abdicate its responsibility in reviewing and approving the financial statements. It should not be under the influence of any dominant personality on the board, neither should it get in the way of executive management.
To go back to to the previous page click here: