For listed companies, establishing an audit committee is mandatory under capital markets regulations, and it consists of independent board members. The committee recommends the selection of the independent auditor to the board, discusses audit findings and ensures the financial statements are reviewed before they are published.
An effective audit committee strengthens communication between the auditor and management.
Related terms
Independent board memberA board member who has no significant relationship with the company or its management and meets the independence criteria.Internal auditAn independent, objective assurance and consulting activity that evaluates the effectiveness of an organisation's risk management, control and governance processes.Management letterA document in which the auditor communicates to management in writing the internal control deficiencies identified during the audit and recommendations for improvement.Corporate governance principlesPrinciples set by the CMB for listed companies concerning shareholders, public disclosure, stakeholders and the board of directors.Adverse opinionThe opinion in which the auditor states that the financial statements are not presented fairly, where misstatements are both material and pervasive.Agreed-upon proceduresAn engagement in which the practitioner performs procedures agreed with the entity and, where relevant, a third party, and reports only the findings without providing assurance.
Last updated: October 22, 2026 · This definition is for general information only.