Audit Committee Administration Of The Engagement

Overview: This article states that management has retained the accounting firm, negotiated the audit fee, and contracted with the accounting firm for other services. The proposed rules, however, recognized the critical role that audit committees can play in the financial reporting process and in helping accountants maintain their independence from audit clients. An effective audit committee may enhance the accountant's independence by, among other things, providing a forum apart from management where the accountants may discuss their concerns. It may facilitate communications among the board of directors, management, internal auditors and independent accountants. An audit committee also may enhance auditor independence from management by appointing, compensating and overseeing the work of the independent accountants. Specifically, the proposed rules would have required the audit committee to approve the engagement of the independent accountant to audit the issuer and its subsidiary's financial statements and have ongoing communications with the accountant These rules apply to all audit, review, and attest services and non-audit services that are entered into after the effective date of these rules.

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Format: HTML | Date: Jan 2003 | Pages: 1