Document ID: chunk:federal_register_of_legislation:F2023C01130:body:0:p80
Version: federal_register_of_legislation:F2023C01130
Segment Type: other
Provision Reference: 
Character Range: 238607–242108

by example.

(b)                When those charged with governance are separate from management, how those charged with governance demonstrate independence from management and exercise oversight of the entity's system of internal control.  An entity's control consciousness is influenced by those charged with governance.  Considerations may include whether there are sufficient individuals who are independent from management and objective in their evaluations and decision-making; how those charged with governance identify and accept oversight responsibilities and whether those charged with governance retain oversight responsibility for management's design, implementation and conduct of the entity's system of internal control.  The importance of the responsibilities of those charged with governance is recognised in codes of practice and other laws and regulations or guidance produced for the benefit of those charged with governance.  Other responsibilities of those charged with governance include oversight of the design and effective operation of whistle blower procedures.

(c)                How the entity assigns authority and responsibility in pursuit of its objectives.  This may include considerations about:

               * Key areas of authority and responsibility and appropriate lines of reporting;

               * Policies relating to appropriate business practices, knowledge and experience of key personnel, and resources provided for carrying out duties; and

               * Policies and communications directed at ensuring that all personnel understand the entity's objectives, know how their individual actions interrelate and contribute to those objectives, and recognise how and for what they will be held accountable.

(d)                How the entity attracts, develops, and retains competent individuals in alignment with its objectives.  This includes how the entity ensures the individuals have the knowledge and skills necessary to accomplish the tasks that define the individual's job, such as:

               * Standards for recruiting the most qualified individuals – with an emphasis on educational background, prior work experience, past accomplishments, and evidence of integrity and ethical behaviour.

               * Training policies that communicate prospective roles and responsibilities, including practices such as training schools and seminars that illustrate expected levels of performance and behaviour; and

               * Periodic performance appraisals driving promotions that demonstrate the entity's commitment to the advancement of qualified personnel to higher levels of responsibility.

(e)                How the entity holds individuals accountable for their responsibilities in pursuit of the objectives of the entity's system of internal control.  This may be accomplished through, for example:

               * Mechanisms to communicate and hold individuals accountable for performance of controls responsibilities and implement corrective actions as necessary;

               * Establishing performance measures, incentives and rewards for those responsible for the entity's system of internal control, including how the measures are evaluated and maintain their relevance;

               * How pressures associated with the achievement of control objectives impact the individual's responsibilities and performance measures; and

               * How the individuals are disciplined as necessary.

The appropriateness