Audit Committee Effectiveness in Victorian Local Government

Abstract

The tenets of local government are based on strong financial probity, adherence to independence principles to avoid conflict of interest and conformance to ethical principles. The research established support from mayors, chief executives and chairs of audit committees for the primary research proposition, but no support for the secondary research proposition. There was a similarity of views in relation to: (1) inputs of an audit committee (charter, skills, activities, communications and induction and training); (2) the behavioural nuances of the rigour of: debate, trust and effective communications; and (3) the relationships with councillors and management. It was found that an audit committee's effectiveness was perceived to be limited by: (1) the ability to attract and retain skilled independent members; (2) the variability of expertise and the skills of the councillor audit committee members; (3) the level of continuing professional development for the councillor audit committee members; (4) the 'gaming' behaviours associated with manipulation of agendas, control of information and the omission of critical data from the audit committee; (5) power games associated with the appointment of councillor members to the audit committee; and (6) domination of the audit committee by one or two members or management.The suggested way forward is to have an audit committee in local government which can provide the effective oversight of organisational governance processes with a specific focus on behavioural outcomes.ii Student Declaration Student Number: 3793755

Eksplorasi Elemen Integrated Reporting Dalam Annual Reports Perusahaan Di Indonesia

“…Konsekuensinya, anggotanya harus memiliki keahlian yang memadai di bidang akuntansi/keuangan (Abernathy et al, 2015;Hayes, 2014;Hamid et al, 2015). Selain itu, anggota komite audit dengan keahlian akuntansi/keuangan cenderung cepat merespon perubahan dalam lingkungan bisnis dan inovasi (Badolato et al, 2014;Goodwin, 2003) dan memiliki kemampuan dalam menilai risiko perusahaan (Purcell et al, 2014). Temuan ini konsisten dengan teori agensi yang mengklaim bahwa untuk mengurangi asimetri informasi dan menyelaraskan kepentingan agen dengan kepentingan prinsipal, anggota komite audit harus memiliki keahlian di bidang akuntansi / keuangan.…”

“…Abernathy et al, 2015;Hayes, 2014). Anggota Komite Audit dengan latar belakang keuangan dan/atau akuntansi dan memiliki pengalaman dan pelatihan cenderung mampu memahami manajemen risiko yang dihadapi perusahaan (Purcell, Francis, & Clark, 2014).…”

Local Government Audit Committees: A Behaviour Framework for Effective Audit Committee Performance

“…An effective and functioning audit committee is seen to be one that assists the councillors and the management in their agency and stewardship obligations by establishing and maintaining reliable systems of internal control and integrity, as well as by enhancing the internal auditor's independence to provide unfettered advice (Cameron , ; Purcell et al. : 62). Audit committees are an established feature of local government governance, with Victoria having over 20 years of experience following amalgamations and local government reforms in the early 1990s.…”

“…This paper uses audit committee experiences from Victorian local government (over 20 years) and suggests that any negative or positive audit committee behaviours displayed in Victorian local government could resonate with audit committees in other Australian local governments as the common factor is people's behaviours, albeit that audit committees in other states will be in varying stages of development. The form of public sector audit committees is discussed by Hegazy and Stafford (), Magrane and Malthus (2016), Purcell (), Purcell et al. (), Sarens et al.…”

“…The form of public sector audit committees is discussed by Hegazy and Stafford (), Magrane and Malthus (2016), Purcell (), Purcell et al. (), Sarens et al. () and Wong () but there is insufficient analysis on the negative and positive behaviours of members of the audit committee which can enable audit committees to function effectively.…”