Audit Committee Resolution Template for England and Wales
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What is a Audit Committee Resolution?
An audit committee resolution is the formal mechanism by which an English company's audit committee records its decisions on financial oversight, auditor relationships, and internal controls. Governed by the Companies Act 2006 and, for listed companies, the UK Corporate Governance Code, these resolutions form part of the company's statutory records. GenieAI's template covers the core elements required for a valid and well-documented committee decision.
Frequently Asked Questions
What is an audit committee resolution under English company law?
An audit committee resolution is a formal written decision passed by a company's audit committee, recording actions such as approving internal audit plans, recommending external auditor appointment, reviewing financial statements, or accepting policy changes within the committee's remit.
Do all companies in England and Wales need an audit committee?
No. An audit committee is required for premium-listed companies under the UK Corporate Governance Code and for public interest entities under applicable FRC rules. Private limited companies are generally not required to have one, though many adopt audit committees as good governance.
Who can sit on an audit committee for a UK listed company?
The UK Corporate Governance Code requires at least three independent non-executive directors, with at least one member having recent and relevant financial experience. The chair of the board cannot chair the audit committee. Independence criteria are set out in the Code's provisions.
How should an audit committee resolution be minuted under English law?
Resolutions should be clearly stated, with the outcome recorded as passed or rejected and any dissenting votes noted. Minutes must be kept under the Companies Act 2006. They should record the date, attendees, quorum confirmation, and any matters declared under a conflicts of interest policy.
Can an audit committee pass resolutions in writing without meeting?
Yes, if the committee's terms of reference or the company's articles permit written resolutions. The resolution document must be signed by all members entitled to vote (or a specified majority), and it should be filed with the board secretary and kept in the company's records.
What decisions typically require a formal audit committee resolution?
Common resolutions cover: recommending the appointment or removal of the external auditor, approving the audit fee, endorsing the internal audit plan, reviewing and approving the annual financial statements before board submission, and assessing the effectiveness of internal controls.
What is the quorum for an audit committee meeting in England?
Quorum is set by the committee's terms of reference. The UK Corporate Governance Code recommends at least two independent non-executive directors. If quorum is not reached, the meeting cannot validly pass resolutions, and any purported decision would be of no legal effect.
How long must audit committee resolutions be retained under English law?
Companies Act 2006 requires that board and committee minutes be kept for at least ten years from the date they are made. Listed companies may have additional obligations under FCA rules. Secure, indexed storage is advisable to support auditor access and regulatory inspection.
About the Audit Committee Resolution
An Audit Committee Resolution is a formal corporate document that records decisions and actions taken by your company's audit committee. Under United States law, these resolutions serve as essential governance tools that demonstrate compliance with federal securities regulations, particularly the Sarbanes-Oxley Act and SEC requirements. The document provides legal documentation of your committee's deliberations and ensures proper corporate governance standards are met.
When do you need this document?
You need an Audit Committee Resolution whenever your audit committee makes significant decisions requiring formal documentation. This includes approving annual financial statements before public filing, selecting or dismissing external auditors, establishing internal control procedures, or addressing material weaknesses in financial reporting. Public companies listed on major exchanges must use these resolutions to comply with NYSE and NASDAQ governance requirements. You'll also need resolutions when implementing compliance programs, approving audit fees, or addressing whistleblower complaints under SOX provisions.
Key legal considerations
Your resolution must demonstrate committee independence as required by Section 301 of the Sarbanes-Oxley Act, ensuring no members have financial relationships that could compromise objectivity. The document should reference your audit committee charter and confirm that at least one member qualifies as a financial expert under Section 407. Include specific recitals citing applicable regulations such as Rule 10A-3 of the Securities Exchange Act and relevant stock exchange listing standards. Your resolution must clearly articulate the committee's authority to engage independent advisors and establish procedures for handling complaints. Documentation of proper notice, quorum requirements, and voting procedures protects against future legal challenges to committee decisions.
Legal requirements in United States
Under federal law, your Audit Committee Resolution must comply with multiple regulatory frameworks governing public company audit committees. The Sarbanes-Oxley Act requires specific committee compositions, with all members being independent directors and at least one financial expert. Your resolution must demonstrate compliance with SEC disclosure requirements under Regulation S-K, particularly regarding committee member qualifications and financial expertise. Stock exchange rules impose additional obligations: NYSE-listed companies must follow Section 303A requirements, while NASDAQ-listed companies must comply with Rule 5600 standards. Your document should reference internal governance documents including corporate bylaws and the audit committee charter. The resolution must provide adequate detail for SEC reporting requirements and potential regulatory examination, ensuring clear documentation of decision-making processes and compliance measures.
GOVERNING LAW
Applicable law
This Audit Committee Resolution is drafted to comply with England and Wales law. Key legislation includes:
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