Annual Audit Manual
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2215 Good practice communication for all engagements
Oct-2012
In This Section
Overview
- Corporate governance
- Assessing our performance
- Meeting the Audit Committee “in camera”
OAG Guidance
Good practice for all engagements
Initiate a dialogue about the role and practices of those charged with governance, to promote a better understanding of their governance function. Ensure that there is a mutual understanding regarding the roles of those charged with governance, management, and the auditor.
With increasing focus on the effectiveness of corporate governance, it is vital that we engage those charged with governance in a dialogue on their roles and practices. The engagement leader needs to stay fully apprised of changing rules and expectations of those charged with governance.
Format and Timing
During the planning phase of the audit process, the engagement leader begins a dialogue with the Chairperson of those charged with governance, management, or others charged with governance to understand their views on their oversight role. Where appropriate, we ensure that a wider discussion of this topic is on the agenda of one of the meetings of those charged with governance.
Detailed Guidance
Take the following actions to understand those charged with governance's perception of its role and provide our insight on corporate governance:
Confirm with those charged with governance that our respective responsibilities are consistent with those set out in our Engagement Letter.
To facilitate the discussion, raise thought-provoking questions and consider the overall philosophy that those charged with governance applies in its conduct, such as:
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What are your priorities? What do you see as the limits to your governance and risk management functions? How would you describe the culture of the organization? Does this enhance or inhibit the performance of your role? What qualities are most important for your role to be effective in this organization? How proactive are those charged with governance compared to others on which you have served? Would those charged with governance benefit from meeting with a wider range of management and employees? If so, with whom? What is the best initiative the committee has taken while you have been a member? Compared to your other Board experience, in what areas have you most challenged management? What additional information would you like to see from management and the OAG? What do you perceive to be the investor perspective on the Company? Is it fair? What can management do to improve this perception? |
Documentation
In the audit file, include the date of the meeting with those charged with governance and the topic discussed.
OAG Guidance
The OAG regularly seeks feedback from organizations that have been the subject of an audit. This valuable feedback helps the Office identify potential areas for improvement. For audits of financial statements, the engagement leader is responsible for preparing and delivering a survey questionnaire. The survey questionnaire is an official communication with those in charge of governance; both English and French versions are required. The survey questionnaire template is available on the OAG INTRAnet in both official languages. Refer to OAG Audit 9081 for more details.
OAG Guidance
It is good practice for the auditor to meet with the audit committee without management present, as this allows for a full and frank discussion between the auditor and the audit committee. We should encourage these “in camera” sessions as a normal and constructive practice.