Members of the Executive are deemed to have executive responsibility for the management of the LLP. There are no fewer than three members and a quorum is half the number of members rounded up to the next whole number. At least two members of the audit committee have recent and relevant experience in finance, accounting and auditing. The audit committee may, if it considers it necessary or desirable, co-opt members with particular expertise.
The Executive member responsible for finance or such other Partner as the Executive may determine as the finance Partner and representatives of the external auditors normally attend meetings of the Audit Committee where business relevant to them is to be discussed. However, at least once a year the audit committee meets with the external auditors without any partner with executive responsibility for the management of the LLP present.
The audit committee meets at least once a year and whenever the external auditors request a meeting.
The terms of reference of the audit committee (see below for a summary of its duties) are drawn up in accordance with best practice and approved by the Governance Council bearing in mind the needs of the LLP. They are agreed with the Executive.
The audit committee has the power to seek any information it requires from any Partner or employee and all Partners and employees are directed to co-operate with any request made by the audit committee. The audit committee has the power to seek outside legal or other independent professional advice and to secure the attendance of non-members with relevant experience and expertise if it considers this necessary, normally in consultation with the National Senior Partner.
The Governance Council ensures that there is a report to the Partners at least annually summarising the activity of the audit committee and any significant issues which arose.
Audit Committee - Duties
a) To advise the Partners, the Executive and Governance Council on the appointment of the external auditors, the audit fee, the provision of any non-audit services by the external auditors and any questions of resignation or dismissal of the external auditors.
b) To discuss with the external auditors, before the audit begins, the nature and scope of the audit.
c) To discuss with the external auditors problems and reservations arising from the interim and final audits, including a review of the external auditor’s report to the audit committee incorporating management responses, and any other matters the external auditors may wish to discuss (in the absence of management where necessary).
d) To consider elements of the annual financial statements in the presence of the external auditors, including the auditors’ formal opinion, the statement of responsibilities and any statement of internal control.
e) To ensure compliance with the requirements of financial reporting and recommend the approval of the statutory accounts to the Executive, Governance Council and the Partners.
f) To advise the Board on the appointment and terms of engagement of any proposed internal audit service (and the head of internal audit, if applicable), the audit fee, the provision of any non-audit services by the internal auditors and any questions of resignation or dismissal of the internal auditors.
g) To review, if an appointment has been made, the internal auditors’ audit risk assessment and strategy; to consider major findings of internal audit investigations and management's response; to promote co-ordination between the internal and external auditors and to review any internal audit annual report. The committee will ensure that the resources made available for any internal audit are sufficient to meet the Firm’s needs (or make a recommendation to the Executive as appropriate).
h) To monitor the implementation of agreed audit-based recommendations, from whatever source.
i) To ensure that all alleged frauds have been properly investigated.
j) To monitor annually the performance and effectiveness of external and internal auditors, including any matters affecting their objectivity, and to make recommendations to the Executive and Governance Council concerning their reappointment, where appropriate.