The Smith Report (2003) focused on the independence of auditors after a number of corporate scandals in both Europe and the United States the recommendations provided in the report outline a number of rules and expected conduct in corporate activities. The report emphasizes the importance of an auditor evaluating the corporate governance structure of an organization to deliver safeguards that protect auditor independence (Ffoakes-Goldson 19).
Barclays PLC Annual Report dating to the financial period ended 2014, highlights the role and responsibilities of its audit committee. The report notes that the focus of the audit committee during the identified financial period has been on encouraging the use of new methods in the assessment of approaches and attitudes of management towards control issues in the organization. The Board Audit Committee at Barclays PLC is primarily made up of independent directors who are not executives. A number of changes were made to the composition of the board in the year 2014 (Barclays PLC 4).
The company has made adequate disclosures on internal controls, audit and risk management practices it utilizes. The committee provided an assessment of the financial practices used to ensure that the financial statements are represented in a transparent, understandable, and balanced manner that reflects an accurate position of the organization. The committee was also tasked with oversight of the external audit tender to KPMG. The estimates, judgments and assumptions are a significant and unavoidable segment of the financial reporting process of the organization and are fully assessed by the Committee towards the release of duly audited and prepared financial statements. The committee is primarily tasked with execution of a number of duties namely the integrity of the financial reporting practices , evaluation of effectiveness of internal controls and the assessment of performance activities of external and internal auditors in terms of independence and objectivity.
The company’s financial statements dating to the year 2014 do not adhere to the set out rules UK Corporate Governance Code 2014. However, the Board of Audit Committee has ensured that the entity remains up to date with prevailing rules of financial reporting and disclosures such that the shareholders and interested investors are provided with adequate information as to the financial position of the organization. It is assumed that the UK Corporate Governance Code 2014 is an addition to standards previously implemented in the year 2012-2013 that provide for corporate governance practices that are in line with public and government expectations in the United Kingdom (Ffoakes-Goldson 36).
The external auditors hold that the financial reporting practices of the company are sound and fair and are reflective of sound financial internal controls and risk management practices. The entity’s selected external auditors have been effective in providing adequate disclosures on the financial practices and strategies used by the company in availing information to the shareholders (Barclays PLC 187). Furthermore, the Auditor’s Report highlights the fact that the entity has been able to ensure that its risk management and internal control practices adhere to international financial reporting standards (IFRS) which ensures that the entity remains up to date in terms of its policies and financial reporting practices.
Barclays PLC. Annual Report 2014. London: Barclays PLC, 2014. Print.
Ffoakes-Goldson, Suzanne C. Commonwealth Caribbean Corporate Governance, 2015. Print.
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