Audit Committees Feel Uncertainty
As per a KPMG’s survey, audit committees around the world have reported that the operational risks, regulatory compliance and political and economic volatility and uncertainty are the challenging issues companies would be facing in upcoming year.
1500 members of audit committees in 36 countries around the globe participated in the survey. It is the 2nd continuous year that the participants stated that it is becoming more difficult to manage risks in addition to financial-reporting given the expertise and time of audit committees.
Half of the participants stated that their jobs are continuously becoming more difficult and 75% stated that their responsibilities are now taking significantly more time.
A lot of committees stated that, apart from the responsibilities of financial reporting, they have some risk management responsibilities like operational risks, global compliance, risk processes of company and technology risks.
The executive director of Audit Committee Institute of KPMG, Dennis T. Whalen stated that clear message is that the audit committees cannot do all of it. He added that the audit and management of financial reporting are main responsibilities themselves and the agendas of several audit committees is being strained by risk environment.
He further added that boards are reallocating and reassessing risk management responsibilities to balance their workload in a better way. Above 33% of the boards have recently done this and more 32% are committed to do so in near future.
He mentioned that the lesser agenda of risks for the audit committees could lead to the thorough business understanding and also additional time availability to focus more on quality.
Lots of members of several audit committees expressed that they wish to get more involved in the financial organization’s work like debt, tax, capital allocation and financial risks management. A greater value can be delivered to the business by the internal audit function.
Although the technology pace and cyber-security were identified as attention requiring issues in the coming year, the US audit committees continue to show confidence in their monitoring of audit and financial reporting.
While assessing their overall effectiveness, the audit committees around the globe stated that they can provide greater benefits through greater thinking diversity and a better understanding of risks and strategies.