Revised Audit Committee Composition
- Audit committee must exclude any executive director, including managing director.
- Ensures independent and objective evaluation of management decisions and financial controls.
Rights and Participation
- Auditors and Key Management Personnel (KMP) have the right to be heard during audit committee meetings, particularly when auditor reports are discussed.
- However, auditors and KMPs do not have voting rights in audit committee meetings.
- KMPs can attend meetings with chair’s permission, but without voting rights.
Audit Committee Functions
- Responsible for:
- Approval of related-party transactions.
- Scrutiny of financial statements.
- Evaluation of internal financial controls.
- Assessment of risk management systems.
Internal Audit Requirements
- MIIs must conduct internal audits at least once annually.
- Internal audit must be conducted by an independent audit firm.
- The internal auditor must report exclusively to the audit committee, ensuring independence from management.
Objective
- These norms aim to enhance corporate governance, strengthen financial transparency, and reinforce risk management at MIIs.
