Singapore – Monetary Authority of Singapore

Singapore – Monetary Authority of Singapore – Code of Corporate Governance – Guidebook for Audit Committees – 19 August 2014. Covering:

Foreword

Chairman’s Message

Acknowledgements

How to use this Guidebook

Table of Abbreviations

Roles and Responsibilities of Audit Committees

Section 1: Audit Committee Composition

• • Independence and Objectivity
  • Role of Nominations Committee in Audit Committee Appointments
  • Selection of Audit Committee Members
  • Selection of Audit Committee Chairman
  • Terms of Reference
  • Tenure of the Audit Committee

Section 2: Audit Committee Agenda

• • Interaction with the Board and Delegation of Responsibilities
  • Tone from the Top
  • Setting the Annual Work Plan
  • Audit Committee Calendar
  • Conduct of Meeting
  • Performance Assessment
  • Training
  • Interested Person Transactions
  • Whistle-blowing

Section 3: Risk Management and Internal Controls

• • Risk Governance and Oversight Structures
  • Board Assurance Framework
  • Enterprise Risk Management (ERM) and Internal Control Framework
  • Assurance Framework
  • Control Deficiency Evaluation
  • Disclosure Requirements

Section 4: Internal Audit

• • Establishing an Internal Audit Function
  • Considerations for an In-house Function
  • Considerations for an Outsourced Internal Audit Function
  • Common Issues Relating to the Audit Committee’s Oversight on the Internal Audit Function

Section 5: Financial Reporting

• • Competence of the Finance Team
  • Overseeing the Integrity of Financial Statements
  • Other Key Financial Information
  • Factors Indicative of Weaknesses in Financial Reporting Process

Section 6: External Audit

• • Role of External Auditors
  • Audit Scope and Approach
  • Management Letter
  • Cost-Effectiveness
  • Private Session with External Auditors
  • Engagement of External Auditors
  • Auditors Independence

Appendicies

Appendix A – Audit Committee Composition

• Appendix A1: Sample Confirmation of Directors Independence Form
• Appendix A2: Sample Audit Committee Terms of Reference

Appendix B – Audit Committee Agenda

• Appendix B1: Audit Committee Annual Agenda Planner
• Appendix B2: Examples of Good Practices for an Effective Audit Committee Chairman
• Appendix B3: Sample Audit Committee Self-assessment Checklists
• Appendix B4: Effective Orientation Programme Topics
• Appendix B5: Differences between Related Party Transactions (RPT) and Interested Person Transactions (IPT)
• Appendix B6: Sample Interested Person Transactions (IPT) Policy
• Appendix B7: Sample Template on Disclosure of Director Interests
• Appendix B8: Examples of Indicators of Potential Related Party Transactions (RPT)
• Appendix 9: Examples of Motivations for Related Party Transactions (RPT)
• Appendix 10: Examples of Indicators of Fraud in Related Party Transactions (RPT)
• Appendix 11: Elements of a Good Whistle-blowing Policy
• Appendix 12: Example of a Whistle-blowing Policy

Appendix C – Risk Management and Internal Controls

• Appendix C1: Possible Types of Risks faced by a Company
• Appendix C2: Risk Governance and Oversight Structures
• Appendix C3: Internal control Framework Overview
• Appendix C4: Evaluating Control Deficiencies
• Appendix C5: Disclosure Requirements

Appendix D – Internal Audit

• Appendix D1: Benefits and Drawbacks on various options for setting up an Internal Audit Function
• Appendix D2: Sample Internal Audit Activity Charter
• Appendix D3: Internal Audit Activity Measurement Criteria
• Appendix D4: Evaluating the Effectiveness of the Internal Audit Team
• Appendix D5: Private Session with the Internal Auditor

Appendix E – Financial Reporting

• Appendix E1: Assessing Fair Values and Estimates in Financial Reports

Appendix F – External Audit

• Appendix F1: Possible Questions for the Private Session with the External Auditor
• Appendix F2: Sample Checklist for Evaluation of External Auditors