Audit committee members need more time, expertise to deal with risky environment, survey says

Posted on: November 13, 2018, by :

Audit committee members need more time, expertise to deal with risky environment, survey says

Many busy audit committee members are feeling strained as they try to
perform effective oversight of the risk process, according to a global
survey by KPMG.

More than 1,500 audit committee members from 34 countries took part
in the survey, which showed that about 75% of respondents believe the
time required to carry out committee responsibilities has increased.
While 52% say they are satisfied with the amount of time and expertise
their committees have to oversee the major risks on the agenda in
addition to core responsibilities, 40% say that balancing is
increasingly difficult, and 8% said they don’t have the necessary time
and expertise.

Audit committee members would like to devote more time to oversight
of the risk process (62%), followed by adequacy of internal controls
related to operational risks (61%), cybersecurity (55%), and legal and
regulatory compliance (52%).

Global economic upheaval and concerns about regulation and
regulatory compliance are the biggest challenges companies face in the
year ahead, according to the survey.

“The resounding message is that the audit committee can’t do it
all,” Dennis T. Whalen, executive director of KPMG’s Audit Committee
Institute, said in a news release. “Overseeing financial reporting and
audit is a major undertaking in itself, and the risk environment is
clearly straining many audit committee agendas today.”

Over the years, the audit committee’s role in risk oversight has
changed, according to the survey. Thirty-five percent said their
committee had reallocated or rebalanced risk oversight
responsibilities among the full board and board committees, and 21%
created new committees to focus on specific categories of risks. While
half of the respondents said they had made no major changes, a
majority of that group said they may consider changes in the future.

In the survey, audit committee members said they would be more
effective if they could have a better understanding of the company’s
strategy and risks (43%); greater diversity of thinking, perspectives,
and experiences (38%); and more time on agendas for general discussion (34%).

The committee members rate themselves highly or generally effective
in oversight of financial reporting disclosures. They are relatively
ineffective in the area of CFO succession planning—42% said they were
ineffective, and just 10% said they were highly effective.

One reason for their perceived ineffectiveness: the quality of
information they receive. Information about cybersecurity needs
improvement according to 41% of respondents, followed by information
about talent management and development (36%), the pace of technology
change (35%), and growth and innovation (30%).

Neil Amato (
) is a JofA senior editor.

Research & References of Audit committee members need more time, expertise to deal with risky environment, survey says|A&C Accounting And Tax Services

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