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Fundamental audit committee principles for local authorities in Scotland are defined for the first time in a new gu...
Fundamental audit committee principles for local authorities in Scotland are defined for the first time in a new guidance note just published by the Chartered Institute of Public Finance and Accountancy Scotland (CIPFA Scotland) and the Scottish Local Authorities directors of finance section.

Backed by Andy Kerr, the Scottish minister for finance and public services, the guidance forms the core for the development of audit committee principles in Scotland. The guidance will assist those local authorities currently in the process of implementing such principles or refining the way in which they seek to achieve them. It will provide them with clear workable guidance on established and agreed features of good practice to improve corporate governance.

The three fundamental principles defining audit committee principles to ensure effective mechanisms for local authorities are:

1.Independent assurance of the adequacy of the risk management framework and associated control environment within the authority

2.Independent scrutiny of the authority's financial and non-financial performance to the extent that it affects the authority's exposure to risk and weakens the control environment

3.Assurance that any issues arising from the process of drawing up, auditing and certifying the authority's annual accounts are properly dealt with

The guidance is a direct response to both the McIntosh report and from comments by Audit Scotland, which expressed a need for such committees to be set up and fully operational. It follows a lengthy consultation period and practical examination of audit committee principles across local authorities in Scotland.

Mr Kerr said: 'I welcome this guidance which highlights the case for applying audit committee principles to reinforce corporate governance practices in Scottish local government.

'Good corporate governance practice, including the independent assurance of both financial and non-financial performance, will increase the public's confid ence that local authorities are complying with their statutory duties, have adequate controls and risk management systems in place and are working to secure best value. I hope that all Scottish local authorities will find this guidance useful in their efforts to achieve continuous improvement in their performance'.

Gordon Edwards, Aberdeen City Council's corporate director of finance and ICT and CIPFA directors of finance section chair, said: 'I have great pleasure in introducing this guidance. Audit committee principles are a key component of corporate governance and the CIPFA directors of finance section continue to lead this agenda in Scotland by the publication of this guidance note.'

The guidance is available here.


1.The councils of the City of Edinburgh, Renfrewshire, Fife and West Lothian actively took part in helping to develop the guidance.

2.CIPFA in Scotland's professional & technical task team and CIPFA directors of finance section coordinated efforts in drafting the guidance.

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