What does an independent audit committee member do?

An independent audit committee member brings expertise and objectivity to the committee that oversees an organisation’s audit, risk and control arrangements, without being part of its management or, in many sectors, its governing body. This article explains what the role involves, what independence means in practice, how the committee’s work runs through the year, the skills organisations look for, how appointments and terms work, and how to recruit an independent member well.

The question matters more each year. CIPFA’s 2022 Position Statement recommends that, where legislation does not already direct it, every local authority audit committee should include at least two co-opted independent members to provide appropriate technical expertise.¹ In England, the English Devolution and Community Empowerment Act 2026 received Royal Assent on 29 April 2026.² Section 94 inserts a new section 33A into the Local Audit and Accountability Act 2014, requiring relevant authorities other than health service bodies to have an audit committee, with regulations to ensure that at least one member is an independent person, as the regulations will define. Those requirements depend on commencement and regulations still to be made.³ In Wales, one-third of the members of a local authority’s governance and audit committee must already be lay persons, and the chair must be a lay person.⁴

What an independent audit committee member does

The term means slightly different things in different sectors. In a company applying the UK Corporate Governance Code 2024, the audit committee is made up of independent non-executive directors, with at least three members (two for smaller companies), and the chair of the board should not be a member.⁵ The FRC’s guidance on the Code says board committees should only comprise members of the board, so in a listed company the independent member is a director.⁶

In local government, policing, housing associations, charities and many other public and not-for-profit bodies, the independent member is often co-opted: appointed to the committee for their expertise, but not an elected councillor or a member of the board. The National Housing Federation’s Code of Governance 2020, for example, applies its tenure rules to “independent committee members” and co-optees as well as to board members.⁷

Whatever the model, the work is broadly the same. CIPFA describes the purpose of the audit committee as providing an independent and high-level focus on the adequacy of governance, risk and control arrangements.¹ For Code companies, the committee’s main responsibilities include monitoring the integrity of the financial statements and reviewing significant financial reporting judgements, reviewing the risk management and internal control framework (unless a separate risk committee does so), and monitoring and reviewing the effectiveness of internal audit.⁵ In practice, an independent member spends most of their time on four things:

• reading reports critically and asking the questions that management and the auditors may not have asked of themselves;
• testing whether the assurance the committee receives is sufficient, reliable and aimed at the right risks;
• following up agreed actions until they are complete;
• helping the committee report clearly to the board or council on what it has done and concluded.

The member does not manage, make executive decisions or carry out audit work. The committee is advisory and holds others to account; it does not do their jobs for them.

Independence requirements

Independence has two parts: independence of mind, meaning the member forms their own judgement and is willing to challenge, and independence in appearance, meaning a reasonable observer would not doubt it. CIPFA expects a local authority audit committee to be independent of both the executive and the scrutiny functions, and lists among the characteristics of membership an inquiring and independent approach, unbiased attitudes and the ability to challenge the executive and senior managers when required.¹

The UK Corporate Governance Code gives the most widely used list of circumstances that are likely to impair, or could appear to impair, a non-executive director’s independence. They include having been an employee within the last five years, having had a material business relationship with the company within the last three years, receiving additional remuneration apart from a director’s fee, close family ties with advisers, directors or senior employees, cross-directorships or significant links with other directors, representing a significant shareholder, and serving on the board for more than nine years.⁵ Public and not-for-profit bodies usually adapt similar tests in their own role descriptions and codes.

For a co-opted member, the practical tests are straightforward. They should not be a current or recent employee or officer of the organisation. They should have no business relationship with it, which means they and any firm they work for should not provide it with internal audit, consultancy or other services. They should have no close personal ties to its senior people, and, in local government, no political role in the authority. They should declare any interest in an agenda item at each meeting and step out where necessary. Independence should be confirmed on appointment and reviewed each year.

Responsibilities through the year

Audit committees work to an annual cycle linked to the financial reporting and audit timetable. CIPFA recommends that a local authority audit committee meets at least four times a year, is able to meet privately and separately with the external auditor and the head of internal audit, and reports annually on how it has discharged its responsibilities, including an assessment of its performance.¹ For Code companies, the FRC’s guidance expects no fewer than three meetings a year and, at least annually, separate meetings with the external and internal auditors without management present.⁶

The table shows an illustrative cycle for an organisation with a 31 March year end. Exact timing depends on the sector, the year end and statutory deadlines.

Period	Typical business for the committee	What the independent member should focus on
April to June	Head of internal audit’s annual report and opinion; draft annual governance or internal control statement; review of draft accounts and significant judgements; counter-fraud annual report	Whether the annual opinion is supported by enough work; whether the governance statement is honest about weaknesses
July to September	External auditor’s completion report; approval or recommendation of the accounts; letter of representation; committee’s own annual report	Unadjusted errors, control findings and the quality of management’s responses
October to December	Internal audit progress and follow-up of actions; risk register and deep dives on principal risks; external audit lessons learned	Overdue actions, repeat findings and whether risk ratings reflect reality
January to March	External audit plan; internal audit plan and charter for the coming year; review of terms of reference; committee effectiveness self-assessment; training	Whether the audit plans cover the principal risks and whether internal audit has the resources it needs

Two items in the cycle deserve particular care. Approving the internal audit plan and charter sets the scope of assurance for the year; our guide to the internal audit charter explains what the committee should expect to see. Reviewing internal audit’s conformance with the Global Internal Audit Standards is the other, because the committee depends on the quality of that function.

Skills and experience committees look for

The best-known requirement comes from Provision 24 of the UK Corporate Governance Code: the board should satisfy itself that at least one member has recent and relevant financial experience, and the committee as a whole should have competence relevant to the sector.⁵ The NHF Code of Governance takes a similar line for housing associations, expecting the committee’s membership to include at least one person with recent and relevant financial experience, proportionate to the organisation’s size and complexity.⁷ CIPFA adds that aptitude should be considered alongside knowledge, skills and experience, and that the appointment of co-opted independent members should take account of the overall knowledge and expertise of the existing members.¹

Beyond financial reporting, organisations commonly look for one or more of the following:

• internal or external audit experience, ideally at a senior level;
• risk management and internal control, including the ability to judge whether controls are tested rather than assumed;
• counter-fraud, information governance or cyber security;
• sector knowledge, such as public finance, housing asset management and building safety, or regulated financial services;
• the personal qualities that make challenge productive: curiosity, clarity, tact and the confidence to keep asking until the answer is clear.

Listed companies have an additional reason to strengthen control expertise. Provision 29 of the 2024 Code, on the board’s declaration about the effectiveness of material internal controls, applies to financial years beginning on or after 1 January 2026.⁸ Our article on Provision 29 and material controls explains what that means for the audit committee. For all members, induction and continuing training matter: the FRC’s guidance says members should be given an overview of the business model and strategy and that regular training can be considered.⁶ Our audit committee and internal audit training is designed for that purpose.

Member, vice-chair or chair

Whether an independent member can hold office depends on the sector’s rules:

• Welsh local authorities: the chair of the governance and audit committee must be a lay person, and the deputy chair must not be a member of, or an assistant to, the executive.⁴
• Housing associations following the NHF Code: the chair of the committee responsible for audit is a member of the board, the chair of the board does not chair or sit on that committee, and executives are not members of it.⁷ A co-opted independent member can therefore serve as a member, but the committee chair must come from the board.
• Listed companies: all members, including the chair, are independent non-executive directors.⁵
• Other bodies: the constitution or terms of reference decide. CIPFA calls for a strong, independently minded chair who promotes apolitical, open discussion and keeps the committee focused on the matters of greatest priority.¹

The chair’s role is larger than the member’s. The FRC’s guidance expects the audit committee chair to keep in touch on a continuing basis with key people, including the board chair, chief executive, finance director, external audit lead partner and head of internal audit, and notes that formal meetings will rarely be sufficient.⁶ A vice-chair should be ready to step in at short notice and is often the chair’s natural successor.

Time commitment

The formal minimum is the meeting cycle: at least four meetings a year under CIPFA’s position statement, or no fewer than three for Code companies.¹⁶ The real commitment is larger. Each meeting needs careful reading of the papers, and members also attend private sessions with the auditors, induction, training and the annual effectiveness review, with occasional additional meetings when an investigation, a qualified opinion or a major incident arises. The FRC’s guidance notes that committee roles can be time-consuming and sometimes intensive, and that appointment letters should set out the expected time commitment.⁶ Agree the expectation in writing before appointment, including how much notice the member will have of papers.

Appointment and terms

Terms limit the risk that long service erodes independence. Under the NHF Code, maximum tenure will normally be up to six consecutive years, typically two terms, extendable to a maximum of nine years where the board agrees it is in the organisation’s best interests, and these provisions apply to service as a co-optee.⁷ Nine years on the board is also one of the UK Corporate Governance Code’s indicators that independence may be impaired.⁵ For English local authorities, section 33A allows the Secretary of State to make regulations about membership, appointment and the payment of allowances and expenses.³

An appointment letter should cover the role and its limits, the term and any renewal, the time commitment, any remuneration and expenses, confidentiality, declarations of interest, induction, and how the member’s contribution will be reviewed.

Working with internal and external audit

An independent member is often the committee’s most experienced reader of audit work. For internal audit, CIPFA expects the committee to oversee its independence, objectivity, performance and conformance to professional standards, and to promote its effective use within the assurance framework. For external audit, the committee should consider the auditor’s opinion, reports and recommendations, monitor management’s response, and support the auditor’s independence and audit quality.¹ For FTSE 350 companies, the FRC’s Audit Committees and the External Audit: Minimum Standard, published in May 2023, sets expectations for the committee’s role on the external audit.⁹ Provision 25 of the 2024 Code includes following the Minimum Standard among the committee’s responsibilities.⁵

Good practice is to meet the head of internal audit and the external audit lead privately, to ask both whether they have had full co-operation from management, and to understand how internal audit is resourced, whether in-house, co-sourced or outsourced, and whether that resource matches the plan.

How to recruit an independent audit committee member

1. Map the gap. Compare the committee’s skills matrix with its terms of reference and the organisation’s principal risks.
2. Write the role description and person specification, including independence criteria, time commitment and any remuneration.
3. Advertise openly to reach a wide and diverse field, not only existing contacts.
4. Shortlist and interview with a panel that includes the committee chair, using a short case exercise based on a real committee paper.
5. Check independence and conflicts before any offer, and take references.
6. Appoint formally through the board or council, with a written appointment letter.
7. Induct and review, with meetings with the chief executive, finance director, head of internal audit and external auditor, and an annual conversation about contribution.

For housing associations in England, the Regulator of Social Housing’s Governance and Financial Viability Standard requires registered providers to adopt and comply with an appropriate code of governance and to explain any areas of non-compliance, so the appointment should follow the chosen code.¹⁰ We work with housing associations on committee composition, and our governance and risk management reviews help boards decide what skills their committees need.

How we can help

Through our independent audit committee members and non-executives service, we provide chartered and certified accountants and internal auditors to serve as independent members, vice-chairs or chairs of audit and risk committees for housing associations, councils and public bodies, charities, academy trusts, colleges and companies. We also offer governance and risk management support and audit committee and internal audit training. To discuss your committee’s needs, book a free 20-minute call.

To protect independence, we do not provide committee members to organisations where we deliver internal audit or other assurance work, and we check for conflicts before every appointment.

This article is general guidance, not legal advice. Take advice on your organisation’s specific circumstances.

Frequently asked questions

What is a co-opted audit committee member?

A co-opted member is appointed to the audit committee for their expertise without being a member of the governing body, such as an elected councillor or a board member. Co-opted independent members are common in local government, policing, housing associations and charities. In a company applying the UK Corporate Governance Code, audit committee members are independent non-executive directors instead.

How many independent members should an audit committee have?

It depends on the sector. CIPFA's 2022 Position Statement recommends at least two co-opted independent members for local authority audit committees where legislation does not already set a requirement, and in Wales one-third of governance and audit committee members must be lay persons. Companies applying the UK Corporate Governance Code should have an audit committee made up entirely of independent non-executive directors, with at least three members, or two for smaller companies.

Are independent audit committee members paid?

Practice varies by sector and organisation. Some bodies pay a fee or allowance and others reimburse expenses only. Whatever is agreed should be set out in the appointment letter alongside the term, time commitment and conflict of interest arrangements.

References

1. CIPFA (copy published in Cyngor Gwynedd committee papers), 2022. CIPFA's Position Statement: Audit Committees in Local Authorities and Police 2022
2. legislation.gov.uk (The National Archives), 29 April 2026. English Devolution and Community Empowerment Act 2026 (introductory text, as enacted)
3. legislation.gov.uk (The National Archives), 29 April 2026 (as enacted; commencement by regulations). English Devolution and Community Empowerment Act 2026, section 94
4. legislation.gov.uk (The National Archives), 2011 (revised text, as amended by the Local Government and Elections (Wales) Act 2021). Local Government (Wales) Measure 2011, section 82: Membership of governance and audit committees
5. Financial Reporting Council, 22 January 2024. UK Corporate Governance Code 2024
6. Financial Reporting Council, 29 January 2024 (last updated 3 June 2026). Corporate Governance Code Guidance
7. National Housing Federation, 12 November 2020. Code of Governance 2020
8. Financial Reporting Council, 22 January 2024. UK Corporate Governance Code (FRC overview page)
9. Financial Reporting Council, 22 May 2023. FRC publishes minimum standard for audit committees
10. Regulator of Social Housing, 31 March 2015. Governance and Financial Viability Standard