Audit committee members around the world are
beginning to see a return to normal pre-credit crisis agendas
again, according to a survey by KPMG’s Audit Committee Institute
(ACI).
ACI’s global survey of audit committee members
found more than three-quarters of audit committee respondents say
this is the case but a ‘normal’ audit committee agenda now includes
more risk management and forecasting for the future.
KPMG ACI director Timothy Copnell said audit
committees have learned clear lessons from the financial crisis and
have adapted to accommodate these new issues.
“A return to normal is in fact a return to a
‘new normal’ in which companies and audit committees need to be
perpetually alive to potential risks and economic threats… their
way of working may in fact never be the same again,” Copnell
said.
More than half of respondents (70%) think risk
management is the top oversight priority in 2010, which is 30% more
than those who think financial statement issues are top
priority.
In the UK, two thirds of audit committee
members are satisfied that their company has robust and mature risk
management systems in place, which is well above the global average
of 40%.
Only about half of UK respondents are
‘somewhat satisfied’ their company’s risk management systems enable
management and the board to identify emerging risks.
ACI found evidence audit committees are
receiving infrequent assessments of a company’s risk management
processes. More than half of UK committees only receive annual or
six-monthly updates from the internal audit team, rather than
quarterly.
The survey also found forecasting assurance is
a high priority as well as regulatory compliance.
One area that is low on the agenda and is a
source of potential risk is sustainability and corporate social
responsibility. Less than half of audit committees globally and 29%
in the UK admit that they do not discuss these issues at all.
However, the ACI predicts this could be an
area that some committees choose to scrutinise more closely given
the high profile that environmental and responsibility issues now
have.
KPMG surveyed more than 1,100 audit committee
members from 28 countries, including more than 100 in the UK,
between December 2009 and April 2010.
