Local council governance and audit committees - the missing link?

Article


Jones, Gregory and Bowrey, Graham. 2013. "Local council governance and audit committees - the missing link?" Journal of New Business Ideas and Trends. 11 (2), pp. 58-66.
Article Title

Local council governance and audit committees - the missing link?

ERA Journal ID40840
Article CategoryArticle
AuthorsJones, Gregory (Author) and Bowrey, Graham (Author)
Journal TitleJournal of New Business Ideas and Trends
Journal Citation11 (2), pp. 58-66
Number of Pages9
Year2013
Place of PublicationAustralia
ISSN1446-8719
1447-9184
Web Address (URL)http://www.jnbit.org/upload/JNBIT_Jones_Bowrey_2013_2.pdf
Abstract

Purpose: This paper examines the level of compliance of NSW Local Government councils with the Internal Audit Guidelines developed and published by the NSW State Government to address the identified weaknesses in the governance structures of the councils. The specific focus is on a key component of good governance, in this instance whether an audit committee was established accordance with the guidelines.

Design/methodology: Archival data was used to research the 2009/2010 Annual Reports and websites of NSW Local Government councils to collect data on the existence and structure of their audit committees. The data is presented and analysed using basic quantitative analysis from which inferences are drawn.

Findings: There is only minimal compliance by NSW Local Councils to the Internal Audit Guidelines in relation to the establishment of an audit committee. The audit committees, which have been established, were reviewed and the structure and membership of a number of these committees were found to not meet the level of independence required as outlined in the guidelines.

Practical implications: This paper highlights the potential risk exposure in Local Government councils. The findings indicate that the current approach of merely recommending the establishment of an audit committee, is not as robust as legislation.

Originality/value: While there is a relatively large amount of literature on Local Government practices there is little on the level of compliance of Local Government councils with specific governance requirements such as the establishment of an audit committee.

Keywordsaudit committees; corporate governance; internal audit
ANZSRC Field of Research 2020350199. Accounting, auditing and accountability not elsewhere classified
350799. Strategy, management and organisational behaviour not elsewhere classified
350101. Accounting theory and standards
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Byline AffiliationsUniversity of Western Sydney
University of Wollongong
Institution of OriginUniversity of Southern Queensland
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