Canadian Government Executive - Volume 21

udit committees are becoming

increasingly important institu-

tions within Canada’s public

sector. They are found in many

provincial and territorial governments

and state-owned enterprises. In the Gov-

ernment of Canada, most departments and

agencies have their own audit committees,

while a special committee serves smaller

organizations.

Audit committees can enhance account-

ability and controllership, ensure an or-

ganization’s risks are appropriately pri-

oritized and addressed, promote strong

governance, accountability and steward-

ship, and reinforce an effective internal/

external audit function.

As expectations for accountability and

stewardship continue to rise, the role of

audit committees has progressed from

traditional governance and oversight to in-

November 2015 //

Canadian Government Executive /

creased involvement in an organization’s

risk management process.

Audit committee effectiveness was the

focus of a panel discussion at the 2015

Government Internal Auditors Council of

Canada (GIACC) annual meeting in July.

Panel members included Dr. Alan Pel-

man (a member of the Agriculture and

Agri-Foods Canada Audit Committee and

past member of the National Research

Council Audit Committee); Beverley

Briscoe (chair of the audit committees of

Goldcorp Inc. and the Office of the Su-

perintendent of Financial Institutions);

Charles-Antoine St-Jean (Canadian Man-

aging Partner, Government and Public

Sector, EY Canada and a former Comptrol-

ler General of Canada); and the author of

this article. The discussion was moderated

by Nova Scotia’s Chief Audit Executive Ted

Doane. Here are some of the highlights:

Strong governance

Getting off on the right foot with a strong

audit committee charter that includes a

clearly defined objective, authorities, and

roles and responsibilities, is critical. “Our

charter [at Agriculture and Agri-Foods

Canada] has real value,” said Dr. Pelman.

“It can be used as the basis for any conver-

sation we have.” The key point is that the

audit committee’s conversation should not

be the same as any other senior manage-

ment meeting, according to Dr. Pelman.

Otherwise, “there is little value added.”

The charter should be reviewed regularly

to ensure it continues to reflect best prac-

tices and aligns with organizational needs.

The internal audit function provides

assurance to the audit committee that an

organization’s risks are being addressed

and that an adequate control environment

is in place. Robust risk-based audit plans

help ensure priorities are aligned with au-

dit committee expectations and resonate

as relevant.

Members with appropriate

skills and experience

Audit committees are increasingly expect-

ed to address such complex issues as risk

management and overall corporate gov-

ernance. To do so, members must possess

a broad range of relevant experience and

expertise. A good blend of internal and ex-

ternal members often makes a committee

more effective.

Ernst & Young’s Audit Committee Lead-

ership Network, in ViewPoints bulletin

published last year, said “audit committees

need more than financial expertise to deal

with their current responsibilities. Quali-

fications such as strategic and operational

experience, industry expertise, and geo-

graphical knowledge are also important,

as is the ability to look at financial issues

from a non-technical perspective.”

Similarly, KPMG’s 2015 Global Audit

Committee Survey revealed that audit

committee members in Canada would

like “additional technology expertise” and

“greater diversity of thinking” on their

committees to improve their overall effec-

tiveness.

Internal Audit

RICK

KENNEDY

CHARLES-

ANTOINE

ST-JEAN

IMPROVING THE EFFECTIVENESS

OF AUDIT COMMITTEES