The Role of Audit Committee Essay Example | Topics and Well Written Essays - 4250 words

The Role of Audit Committee - Essay Example The audit committee's role is equally important in both the private and public sector. The effectiveness of the audit committee, the various flaws and inconsistencies in their functions and theoretical underpinnings are all considered along with examples of corporate collapses due to audit committee faults. Audit committees' role in the United Kingdom's Parliamentary system of government stems from the concept of apt management and responsible expenditures considering that taxpayers' money constitutes the capital that must be appropriated for public services (Hollingsworth, and White 1999). So, all disbursements must be within the constitutional provisions of the legislative system. Relatively, legislated protocols are in placed to ensure consistency, and to avoid corrupt practices that may lead to waste. In addition to the department of budget, the office of the commission on audit was created to oversee and assure legitimate expenditures and to avoid deficits as much as possible. Chances are high, that the members of the audit committee are certified public accountants and lawyers considering the nature of the role that the audit committee plays in the configuration of appropriate budget consistent with interpreted laws. As far as audit committee role in the Parliament is concerned, the U... The set of legal rules are contained in the Supply procedure documents. Normally, an annual audit report is submitted to the legislative body at the end of the fiscal year (Hollingsworth, and White 1999). In the preparation of an annual budget that will cover expenditures for the subsequent fiscal year, the bureaucracy's independent subdivisions perform three general standard functions: 1) set the budget allocation for the year; 2) rank expenditures according to importance; 3) at the release of an approved budget for disbursement, asses, evaluate, and audit the values of the supposed expenditures. Subsequently, after the documents are submitted to the executive department, the senior management will collate and prepare to support the tentative annual budget. This annual budget will then be submitted by the senior management to the parliament. The legislative body will deliberate on the budget extensively prior to endorsement. Consequently, whatever part of the budget appropriation is found substantive the legislative body will cast their ballot on it, making the same available for disbursement. 4) Finally, after all the funds appropriated were approved and disbursed according to the p lan, the accounting commission will issue a corresponding report which will be dully evaluated by the audit commission for proprietary considerations (Hollingsworth, and White 1999). However, the "constitutional analysis, especially by lawyers, has tended to underplay the significance of audit, especially the role of the Comptroller & Auditor General (Deloitte & Touche, 2009) and National Audit Office in the accountability of government" (Hollingsworth, and White 1999). Audit Committee