Premium and standard listed companies are required to comply with DTR 7.1 which implemented the requirements of Article 41 of the Statutory Audit Directive 2006/43/EC relating to the composition and functions of audit committees. In April 2014, the EU issued the EU Audit Regulation (EU) 537/2014 and the Statutory Audit Amending Directive 2014/56/EU. The DTRs, the UKCG Code and the FRC's Guidance on Audit Committees were revised in June 2016 to reflect the requirements of the EU Audit Regulation and Statutory Audit Amending Directive for listed companies. At the same time Statutory Auditors Third Country Auditors Regulations 2016 SI 2016/649 (SATCAR 2016) made a number of changes to CA 2006, Pt 16 relating to the appointment of auditors. An audit committee should be a committee independent from the main board of a company with sufficient authority and resources to form an opinion and report on the company’s risk management, control and governance arrangements. Among other things an audit committee should monitor the financial reporting process and submit recommendations or proposals to ensure its integrity; monitor the effectiveness of the company's internal quality control and risk management systems and, where applicable, its internal audit, regarding the financial reporting of the company, without breaching its independence; and monitor the statutory audit of the annual and consolidated financial statements, in particular, its performance, taking into account any findings and conclusions by the FRC.

This Checklist summarises the UK Corporate Governance Code and Disclosure Guidance and Transparency Rules requirements relating to the composition of the audit committee of quoted companies together with best practice guidelines of major institutional investor representative bodies. It also includes guidance from the Quoted Companies Alliance for small and mid-size quoted companies and from the Association of Investment Companies for investment companies. Quoted companies (other than investment companies) Source Recommendation Reference UK Corporate Governance Code (UKCG Code) Audit committee should comprise at least three, or in the case of smaller companies (ie those outside the FTSE 350) two, independent non-executive directors.The board chair should not be a member of the committee.The board should satisfy itself that at least one member of the audit committee has recent and relevant financial experience. The audit committee as a whole should have competence relevant to the sector in which the company operates. UKCG Code, Provision 24 Disclosure Guidance and Transparency Rules (DTRs) For companies with transferable securities admitted to trading on a UK recognised investment exchange:– a majority

Where a company prepares annual accounts for a financial year, those accounts must be audited unless the company is exempt from the requirement to audit its accounts. For example, a company will not be required to audit its accounts if it falls within any of the following: —audit exemption for small companies —audit exemption for dormant companies —audit exemption for qualifying subsidiaries

If a company or LLP prepares annual accounts for a financial year, they must be audited unless the entity is exempt from audit. Audit exemption for micro-entities A company or LLP that qualifies as a micro-entity may take advantage of the audit exemption set out in sections 477–479 of the Companies Act 2006 (CA 2006), if it satisfies the relevant conditions. For details of how a company or LLP qualifies as a micro-entity, see Practice Notes: The micro-entities regime and The micro-entities regime for LLPs. Audit exemption for small companies or LLPs A company or LLP that satisfies certain conditions may benefit from an exemption from the requirement to audit individual accounts for a financial year. The relevant conditions are that: • it qualifies as a small company or LLP in relation to that financial year (for details of how a company or LLP qualifies as small, see Practice Notes: The small companies regime and The small LLPs regime) • its balance

An ‘audit firm’ is a firm that is approved to carry out statutory audits

This Checklist sets out key considerations a controller should typically take into account when conducting an audit for the purposes of evaluating the suitability of a prospective or existing processor of personal data under the United Kingdom General Data Protection Regulation, Assimilated Regulation (EU) 2016/679 (UK GDPR). For further information about controllers’ obligations and engaging processors under the UK GDPR regime, see Practice Notes: • The UK General Data Protection Regulation (UK GDPR) • Key definitions under UK data protection law • Supply chains under data protection law—arrangements between controllers and processors Audits of processors Although processors subject to the UK GDPR have their own particular responsibilities under the legislation, controllers remain responsible for the processor’s processing of personal data under their instructions. Under: • the accountability principle of the UK GDPR: the controller is responsible for and must be able to demonstrate compliance with the data protection principles set out in Article 5(1) of the UK GDPR (which includes the lawfulness, fairness and transparency, purpose limitation, data minimisation, accuracy, storage limitation

Specific definitions used in this Precedent Audit • means an audit of the Supplier’s records, accounts or other relevant information relating to this Agreement (including copying of documents and access to Supplier premises). 1 Audit rights 1.1 The Supplier shall maintain appropriate records in respect of the Fees payable and the performance of its obligations under this Agreement during the Term and for a period of [insert number of years ] following termination of this Agreement, in such format

See Financial Reporting Council (FRC)

Auditing suppliers can be a useful tool in identifying modern slavery and human trafficking abuses in your supply chain. This Practice Note describes what a good modern slavery and human trafficking supplier audit process looks like and provides guidance on who should conduct audits, how to prepare for and carry out an audit, and how audits should be followed up. Who should conduct the audit? Whether you use internal auditors, an external firm, a local NGO or a combination of the three, the auditor or team of auditors must be trained professionals who have in-depth knowledge of the risk factors. They must have the ability to identify and investigate labour abuses and recognise indicators of forced labour, sometimes in challenging environments. Key things to think about if you are looking at external auditors include: • the tools and approaches they use, eg they don’t just look at current labour conditions, they also focus on recruitment • ensuring the auditors speak the same language as the supplier’s workforce and understand conditions and risks in the local environment

An auditor is an independent professional engaged to examine and report on an organisation’s financial statements and, where required, aspects of its internal controls and compliance. In legal practice, the term most often arises in company law, insolvency, banking, charities and public sector regulation.In England and Wales, Scotland and Northern Ireland, “statutory auditor” is defined and regulated principally by the Companies Act 2006 and associated regulations, which implement the UK’s audit regulatory framework. In Ireland, equivalent concepts and requirements are set out primarily in the Companies Act 2014 and related legislation. Across all four jurisdictions, an auditor must usually be appropriately qualified and registered, and is subject to strict independence, professional and ethical standards.Auditors have core duties to the members of the company or other entity, including reporting whether the financial statements give a “true and fair view” and have been properly prepared in accordance with applicable law and accounting standards. Their reports and working papers are frequently central in litigation, regulatory investigations, directors’ disqualification proceedings, professional negligence claims, and corporate transactions.

An auditor appointed by the Audit Commission to audit the accounts of a local authority or other relevant body under the Audit Commission Act 1998 (ACA 1998), s 3.

The report on the annual accounts of a company prepared by the company's auditor.