Key areas to watch in relation to audit committee effectiveness include:

  • encouraging a forward-looking approach to audit committee agendas that refers to the committee's remit, key organisational risks and audit committee concerns;
  • ensuring audit committee papers are clear and focused; and
  • paying attention to time management within the committee, with common patterns of some topics overrunning on time and others being regularly squeezed (with internal audit updates being a commonly reported area that’s squeezed).

Attendees at audit committee meetings should be aware of a number of key group dynamic pitfall areas, including:

  • the halo effect - where impressive managers are no longer challenged;
  • group think - where the committee tends to agree on all key matters;
  • pairing - where the committee splits creating factions and a sense of unresolved issues; and
  • fight/flight - where the committee gets "excited" about certain issues, often looking for a scapegoat but not looking at more strategic (but less urgent) issues.

Multiple-choice questions