Audit charter
- Term
- Audit charter
- Exam
- CISA
- Definition
A document approved by the board or audit committee that sets out the audit function's purpose, authority, responsibility and accountability.
- Explained
The charter is the audit function's constitution. It sets out its purpose, authority and responsibility, including unrestricted access to records, systems and people, and its reporting line to the audit committee. Because it comes from the board, it protects audit independence from management interference. It should be reviewed periodically and whenever the function's mandate changes.
- In practice
The audit committee approves a charter giving internal audit unrestricted access to systems, records and staff.
- Often confused with
- Engagement letter
- Exam angle
The charter grants authority and access. An engagement letter covers a single audit.
- Related