An independent director plays a crucial role in the audit committee of a company. The audit committee is responsible for overseeing financial reporting, internal controls, and risk management processes.

The independent director's role within the audit committee includes a range of important responsibilities to ensure transparency, accuracy, and compliance in the company's financial activities. Here are the key roles and responsibilities of an independent director in the audit committee

Financial Reporting Oversight

• Reviewing and monitoring the integrity of the company's financial statements and disclosures.
• Ensuring that financial statements are presented fairly and in accordance with accounting principles and relevant regulations.
• Discussing significant accounting and reporting issues with management and external auditors.

Internal Control Review

• Assessing the adequacy and effectiveness of the company's internal controls and risk management processes.
• Overseeing the implementation of internal control recommendations made by auditors.
• Evaluating the company's processes for identifying, assessing, and managing financial and operational risks.

External Audit Engagement

• Selecting and recommending external auditors to the board of directors and shareholders for approval
• Overseeing the external audit process, including reviewing the audit plan and scope of work
• Reviewing the auditor's findings, recommendations, and management's responses.

Whistleblower Mechanism Oversight

• Overseeing the company's whistleblower mechanisms to ensure employees have a confidential way to report financial misconduct or unethical behaviour.
• Reviewing reported concerns related to financial matters and ensuring appropriate action is taken.

Compliance And Legal Matters

• Reviewing the company's compliance with applicable laws, regulations, and standards related to financial reporting and accounting practices.
• Monitoring the company's adherence to corporate governance guidelines.

Communication And Reporting

• Reporting to the board of directors on the audit committee's activities, findings, and recommendations
• Providing transparency to shareholders and stakeholders regarding the company's financial reporting and internal control processes.

Risk Assessment

• Identifying and assessing potential financial and operational risks that could impact the company's financial statements.
• Collaborating with management to address risks and implement appropriate controls.

Independence And Objectivity

• Demonstrating independence and objectivity in all audit committee discussions and decisions.
• Avoiding conflicts of interest that could compromise the committee's integrity and effectiveness.

Continuous Improvement

• Promoting a culture of continuous improvement in financial reporting and internal control processes.
• Staying informed about evolving accounting standards, regulations, and industry best practices.

Independent directors in the audit committee act as a safeguard to ensure the accuracy and reliability of financial information, maintain transparency, and enhance investor confidence.

Their active involvement helps prevent financial misstatements, fraud, and unethical practices, ultimately contributing to the long-term sustainability and success of the company