Division Board Audit Committee - Banking, Insurance and Life Insurance (prudential standards) determination No. 3 of 2011 - Prudential Standard CPS 510 - Governance - Board Audit Committee

A regulated institution (excluding foreign ADIs and Category C insurers but including EFLICs) must have a Board Audit Committee, which assists the Board by providing an objective non-executive review of the effectiveness of the regulated institution’s financial reporting and risk management framework unless, with respect to risk management, there is another Board Committee which carries out this function.
The Board Audit Committee must have sufficient powers to enable it to obtain all information necessary for the performance of its functions.
The Board Audit Committee must have at least three members. All members of the Committee must be non-executive directors of the regulated institution. A majority of the members of the Committee must be independent.
The chairperson of the Board Audit Committee must be an independent director of the regulated institution.
The chairperson of the Board may sit on the Board Audit Committee, but may not chair the Committee.
The Board Audit Committee must have a charter that includes a reference to the fact that the Committee is responsible for the oversight of:

(a) all APRA statutory reporting requirements;

(b) other financial reporting requirements;

(d) internal and external audit; and

(e) the appointment of the regulated institution’s auditor.

The Board Audit Committee must review the engagement of the auditor at least annually, including making an assessment of whether the auditor meets the Audit Independence tests set out in APES 110 Code of Ethics for Professional Accountants,[12] as well as the additional auditor independence requirements set out in this Prudential Standard.
For a foreign ADI or a Category C insurer, the assessment referred to in paragraph 70 is the responsibility of the senior officer outside Australia, and for an EFLIC, it is the responsibility of the Compliance Committee.
The Board Audit Committee must regularly review the internal and external audit plans, ensuring that they cover all material risks and financial reporting requirements of the regulated institution. It must also regularly review the findings of audits, and ensure that issues are being managed and rectified in an appropriate and timely manner.
The Board Audit Committee must ensure the adequacy and independence of both the internal and external audit functions.

Board Audit CommitteeBoard Audit Committee