REVIZIJSKI ODBOR KAO ČIMBENIK KVALITETE EKSTERNE REVIZIJE
AUDIT COMMITTEE AS A FACTOR OF EXTERNAL AUDIT QUALITY

Summary/Abstract: The European Union statutory audit Directive and Regulation require that public interest entities must have an organized audit committee. Audit reform, initiated by the new regulatory framework at the European Union level, has introduced new rules that, among other things, strengthen the role of audit committee in terms of its composition and competences of its members. Accordingly, the majority of the audit committee members should be independent, while committee members as a whole must possess knowledge of the sector in which the audit subject operates. In addition to the tasks of supervising the process of conducting the statutory audit of financial statements, its findings and conclusions, the audit committee is now responsible for the election procedure and the nomination of a certified auditor or audit firm. In addition, the audit committee informs the board of directors or the supervisory board of the statutory audit outcomes, as well as examines and monitors the auditor’s independence. Therefore, it is evident that the audit Directive gives significant responsibility to audit committees in terms of overseeing the auditor’s independence. The main objectives of this paper are: 1) to outline and summarize key responsibilities of the audit committee in the context of achieving corporate governance goals, 2) to investigate the results of previous research on the contribution of the audit committees to the quality of external audit, 3) to examine whether auditors and audit users perceive audit committees as important factor of external audit quality. The presented findings of the primary research conducted on a sample of respondents in Croatia show that all respondents on average evaluate the impact of the existing active and expert audit committee, as well as its timely communication with auditors, positive from the aspect of its impact on audit quality. This is particularly emphasized at the level of internal audit users as employees of audited entities. Accordingly, audit committees may be considered as an important factor in the quality of external audit.

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