Information Systems Control Journal, Volume 5, 2000

Book Review

The Audit Committee Handbook, Third Edition

Louis Braiotta, Jr., CPA
Reviewed by Sarathy Emani, CISA
Volume 5, 2000

Intended for audit committees, this book offers exhaustive coverage of statutory standards and guidelines, enabling these committees to understand the many issues associated with their existence and legal status. It helps audit committees to:

• Understand their roles and responsibilities, with a reality check on auditing cycle activities
• Identify the developments that impact audit committee practices
• Understand the latest authoritative sources that lay forth the effective strategies intended to help the board of directors discharge their fiduciary responsibilities to the stakeholders
• Develop a comprehensive professional development program which enables committee members to prepare a periodic assessment of their activities
• Understand the legal position of the audit committee and the role of legal counsel

The first section concentrates on explaining the audit director's basic responsibilities, and includes discussions about corporate accountability, external users of accounting information and the legal position of the audit committee. It also deals with a framework of generally-accepted auditing standards and the way these standards integrate with generally-accepted accounting principles.

But a good audit committee cannot function properly without detailed planning. The second section focuses upon the planning function of the audit committee, giving an initial overview of the concept and presenting an explanation of the audit director's role. It also addresses the problems associated with the selection or reappointment of the public accounting firm.

Section three describes the monitoring and reviewing functions of audit committees. This information focuses on the system of internal control, the internal audit function, accounting policy disclosures, management fraud and business practices.

One of the important duties of an audit committee is to prepare the reports that draw together the conclusions that all their other aspects provide. Section four covers the reporting function of the audit committee, paying special attention to an overview of the independent auditor's opinions and reports. It explains the purpose of the audit director's report and discusses the guidelines for preparing it.

The book also contains several appendices which include additional information, ranging from a historical perspective on audit committees, to details on various laws and acts that affect audit committees, to specific standards and codes of conduct. The book is intended to aid audit committees in understanding and fulfilling their roles. However, most of the codes, standards, guidelines and best practices that it details are only fully applicable in technically advanced countries such as the United States. Since such issues have not entered into the legal arena in many countries, this handbook would be of limited use to those within such countries.

Sarathy Emani, CISA
is a member of the Publications Committee.

Ordering information for this book can be found in the ISACA Bookstore.