Audit Committee Resolution Template for Australia

An Audit Committee Resolution is a foundational corporate governance document that formally establishes your company's audit oversight function. Under Australian law, this resolution grants specific powers and responsibilities to your audit committee, ensuring compliance with the Corporations Act 2001 and relevant regulatory frameworks. The document defines committee composition, independence criteria, and operational procedures that govern how your audit committee will oversee financial reporting, internal controls, and external audit relationships.

When do you need this document?

You need an Audit Committee Resolution when establishing a new audit committee or updating existing committee arrangements. Public companies listed on the ASX must have an audit committee under the ASX Listing Rules, while large proprietary companies may require one under the Corporations Act 2001. The resolution becomes essential when restructuring your board, appointing new committee members, or responding to regulatory changes. You'll also need this document when expanding committee responsibilities, addressing ASIC recommendations, or implementing new corporate governance policies. Companies undergoing significant transactions or regulatory reviews often require updated audit committee resolutions to demonstrate proper governance structures.

Key legal considerations

Your audit committee resolution must address several critical legal requirements. Committee composition is paramount – you need at least three members for ASX-listed companies, with a majority being independent non-executive directors and at least one member having relevant financial expertise. The resolution must clearly define the committee's authority to engage external advisors, access company information, and interact directly with auditors without management present. Risk management provisions should outline how the committee oversees internal control systems and compliance programs. The document must establish clear reporting lines to the board and define the committee's role in auditor selection, remuneration, and performance evaluation. Confidentiality and conflict of interest provisions are essential to maintain committee independence and integrity.

Legal requirements in Australia

Under the Corporations Act 2001, your audit committee must comply with specific statutory requirements regarding composition and responsibilities. For ASX-listed companies, the committee must have at least three members, all non-executive directors, with a majority being independent. The chairperson must be independent and cannot be the board chairperson. ASIC expects committees to maintain detailed records of meetings and decisions, particularly regarding auditor independence and internal control assessments. Your resolution must align with Australian Accounting Standards Board requirements for financial reporting oversight and Auditing and Assurance Standards Board standards for audit quality monitoring. The committee charter embedded in your resolution should address ASX Corporate Governance Principles, particularly those relating to audit quality, auditor independence, and financial reporting integrity. Regular review and updating of the resolution ensures ongoing compliance with evolving regulatory expectations and best practice standards.