Best Practices Regarding the Organization and Functioning of Audit Committees

The article intends to identify best practices regarding the organization and functioning of audit committees in the corporate governance codes, listing requirements of stock exchanges and views of practitioners. The first section is dedicated to the establishment of audit committees, covering the size and composition of the committee and the content of its charter. The second section explains the main attributes of efficient audit committee members (independence, financial literacy and expertise) and the procedures for the nomination and induction of audit committee members. The conduct of meetings is presented in the third section. It also approaches issues such as meeting frequency and self-assessment of the committee’s performances. The fourth section details the role and content of the reporting documents prepared by the committee. The last section summarizes the best practices expressed in previous sections.