K.R. Chauke and N.E. Mathebula

DOI: https://doi.org/10.6000/1929-7092.2019.08.138

Published: 31 December 2019

Abstract: The Institute of Directors of Southern Africa (IoDSA) issued King IV Report on Corporate Governance for South Africa on the 1st November 2016. As it was in the predecessor’s King Reports, it became evident that the roles of Audit Committees (ACs) are still considered to be one of the most useful and necessary governing bodies in any organisation. A plethora of literature suggest that, there are little differences, between King IV and King III reports on corporate governance, as different committees continue to function as they were functioning before. This paper is conceptual in nature and seeks to make a critical analysis on the requirements of the King IV in assisting ACs in terms of awareness, their duties and responsibilities through the use of literature review. The paper further seeks to point out the qualifications in terms of who is supposed to serve in the ACs and the responsibilities thereof. The paper uses State-Owned Enterprises (SOE's) in South Africa as units of analysis to interrogate the role their ACs ought to, particularly in the context of changes affecting organisations and their operations. The role of ACs is no different from how they operate in SOE's. The extent to which the AC should confirm satisfaction with external auditors, concerning their tenure, rotation of audit firms, rotation of partners, policies and controls concerning non-assurance services is to be dealt with. The recent failures in corporate governance in SOEs in South Africa, have left suspicion on the role played by the ACs, as they are regarded as the primary monitor of the organisational financial performance.

Keywords: King IV report, King III report, Audit Committee, Governance, External Auditors.

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