Terms of reference
to advise the 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
to discuss with the External Auditors, before the audit begins, the nature and scope of the audit
to discuss with the External Auditors problems and reservations arising from the interim and final audits, including a review of the management letter incorporating management responses, and any other matters the External Auditors may wish to discuss (in the absence of management where necessary)
to monitor annually the performance and effectiveness of External and Internal Auditors, including any matters affecting their objectivity, and to make recommendations to Council concerning their reappointment, where appropriate
to consider and approve the arrangements for the Internal Audit Service, to determine with professional services the appointment of the Head of Internal Audit and to advise Council of any concerns about the resignation or dismissal of the Head of Internal Audit
to review every three years the Internal Audit Service to ensure that it is performing efficiently, effectively and economically
to review and approve the Internal Auditors’ audit risk assessment, strategy and programme; to consider major findings of internal audit investigations and management's response; and to promote co-ordination between the Internal and External Auditors. The Committee will ensure that the resources made available for internal audit are sufficient to meet the institution’s needs (or make a recommendation to Council as appropriate)
to keep under review the effectiveness of the risk management, control and governance arrangements, and in particular to review the Internal Auditors' annual report, and management responses
to monitor the implementation of agreed audit-based recommendations, from whatever source
to consider in the presence of the External Auditors, the final version of the audited financial statements after they have been submitted to Finance Committee reviewing the auditors’ formal opinion, the corporate governance statement including a report from the Remuneration Committee, the statement of members’ responsibilities and the statement of internal control in accordance with the Office for Students’ Accounts Directions; the statement of principal accounting policies, the statement of consolidated and University comprehensive income, the consolidated and University statement of changes in reserves, the consolidated and University balance sheet and the consolidated cash flow statement. The role of the Committee will be to consider whether the University has adopted appropriate accounting policies, made appropriate estimates and judgements, made disclosures with appropriate clarity and completeness and set these properly in context. The Committee will receive, as appropriate, a report on any critical judgements informing the preparation of the accounts. The Committee will then recommend, if thought fit, the financial statements to Council for approval
to consider reports from Finance Committee on any changes to accounting policies
to review the External Auditors’ letter of representation
to satisfy itself that suitable arrangements are in place to promote economy, efficiency and effectiveness
to oversee the institution’s policy on fraud and irregularity, including being notified of any action taken under that policy
to ensure that all significant losses have been properly investigated and that the Internal and External Auditors, and where appropriate the Office for Students’ Accounting Officer, have been informed
to consider risk management reports and to recommend to Council the Risk Register
to recommend to Council the Public Interest Disclosure (Whistleblowing) Policy and Procedure and to receive reports of disclosures made or an annual statement of confirmation that no such cases have arisen
to receive any relevant reports from the National Audit Office, the Office for Students and other organisations
in the event of the merger or dissolution of the institution, to ensure that the necessary actions are completed, including arranging for a final set of financial statements to be completed and signed
Roles and responsibilities
The Finance Committee has general supervision of the finances of the University. The Audit and Risk Assurance Committee reviews the effectiveness of the risk management, control and governance arrangements. In connection with this, risks of undertaking an accounting policy change in the financial statements are delegated to the Finance Committee. In the case of a policy change, the Audit and Risk Assurance Committee will receive assurance from the Finance Committee (via an extract of the minutes or more detailed report) that those risks have had due consideration. The Audit and Risk Assurance Committee will consider annually when it reviews the financial statements whether the University has adopted appropriate accounting policies, made appropriate estimates and judgements, made disclosures with appropriate clarity and completeness and set these properly in context. The Remuneration Committee, under delegated authority of Council, determines the remuneration of senior officers of the University.
Membership and Appointment of Chair
Four lay members of Council, appointed by Council on the recommendations of the Nominations Committee, one of whom is appointed Chair of the Committee by Council on the recommendation of the Nominations Committee. Two members who are not members of Council, appointed by Council on the recommendation of the Nominations Committee.
There shall be a quorum at meetings of one-third of the membership. See Council Standing order 16(vi)
Rules for voting
There are no specified rules for voting.
Minutes are reported to Council (and Finance Committee for information).
To ensure independence of the Audit and Risk Assurance Committee, it is currently best practice that all of its members should be independent and non-executive. Staff of an institution are not deemed to be independent.
None of the members of the Committee may also be members of the Finance Committee.
The Chair of Council may not be a member of the Committee.
The Committee must consist of members with no executive responsibility for the management of the institution. Members should not have significant interests in the institution.
At least one of the members will have recent and relevant experience in finance, accounting and auditing.
The quorum for the Committee will be one-third of the membership. See Council Standing Order 16 (vi).
The term of office for both lay members and co-opted members of the Committee is three years (renewable in accordance with Council Standing Orders).
Attendance at meetings
The Vice-Chancellor and President, Director of Finance, Deputy Director of Finance and the Head of Internal Audit shall normally attend meetings of the Committee. A representative of the External Auditors shall normally attend meetings. However, at least once a year the Committee should meet with the external and internal auditors without any officers present. Relevant managers should be invited to attend meetings of the Committee when their area of responsibility is under examination.
Frequency of meetings
Meetings of the Committee shall normally be held at least five times each financial year. The External Auditors or Head of Internal Audit may request a meeting if they consider it necessary.
The Committee is authorised by Council to investigate any activity within its terms of reference. It is authorised to seek any information it requires from any employee, and all employees are directed to co-operate with any request made by the Committee.
The Committee is authorised by Council to obtain 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 Vice Chancellor and President and/or Chair of Council. However, it may not incur direct expenditure in this respect in excess of £10,000, without the prior approval of Council.
The Audit and Risk Assurance Committee will review the audit aspects of the draft annual financial statements. These aspects will include the external audit opinion, the statement of members’ responsibilities, the statement of internal control and any relevant issue raised in the External Auditors’ management letter. The Committee should, where appropriate, confirm with the Internal and External Auditors that the effectiveness of the internal control system has been reviewed, and comment on this in its annual report to Council.
The minutes of the meeting of the Committee will be submitted to Council and to Finance Committee (for information).
The Committee will prepare an annual report covering the institution's financial year and any significant issues up to the date of preparing the report. The report will be addressed to Council and the Vice-Chancellor and President, summarising the activity for the year. It will give the Committee's opinion on the adequacy and effectiveness of the institution's arrangements for the following:
- Risk management, control and governance (the risk management element includes the accuracy of the statement of internal control included with the annual statement of accounts)
- Economy, efficiency and effectiveness (value for money). This opinion should be based on the information presented to the Committee. The Audit and Risk Assurance Committee Annual Report should normally be submitted to Council before the members' responsibility statement in the annual financial statements is signed
- Management and quality assurance of data submitted to HESA (Higher Education Statistics Agency), the Student Loans Company, Office for Students and other bodies
- This opinion should be based on the information presented to the Committee. The Audit and Risk Assurance Committee Annual Report should normally be submitted to Council before the members’ responsibility statement in the annual financial statements is signed
The clerk to the Audit and Risk Assurance Committee will be the Secretary to Council or another appropriate independent individual (i.e. not the Internal Auditor or the Secretary of Finance Committee).
Owner: Audit and Risk Assurance Committee
Approval Date: May 1988, revised 13 May 2005, 23 October 2008, 25 February 2010 and 29 November 2018
Approved By: Council
Date of last review: 29 November 2018