Communication between audit firm & audit committee

Under the system of corporate gorvenance ,the external audit primary point of contact with the company is the audit committee, the reason being,

1. EA ensure there is an independent between the BOD and the audit committee.The audit committee consist of NED who by definition are independent of the Co therefore take an objective view of the audit report.

2. In audit committee, they have more time to review the audit report compare to the BOD . The EA therefore benefit from the audit report being reviewed carefully.

3. The AC can ensure the recommendations from EA are implemented because they have independent NED thet can pressurise the BOD to take in action on EA recommendation

4. The AC have more time to review the effectiveness & effiency of the EA work, therefore can make recommendations on re-appointment of EA