Increased oversight responsibility of audit

Montreal Toronto IT audit support

According to still accurate KPMG 2013 Global Audit Committee Survey, most of the 1800 Audit committee members in many countries around the world, generally gave low ratings to their audit committee’s oversight of risk—including « understanding the committee’s risk oversight responsibilities ».

Many point to the need for “additional expertise” (e.g., information technology, merger and acquisition, and risk) as a key to improving the committee’s effectiveness.One in four said the audit committee’s self-evaluation is not as robust as it should be.KPMG explains that « In addition to their core responsibilities, many audit committees today have oversight responsibility for the company’s enterprise risk management process as well as other major risks facing the company—including financial, operational, cyber security and it, and legal/ regulatory compliance risks. »KPMG’s Audit Committee Institute underlines broader governance matters. Audit committees should :

  • Consider whether the board has the right composition and committee structure to provide effective risk oversight.

  • Understand how digitization and social media are transforming the business landscape—and impacting the company and board oversight.

  • Set the tone and closely monitor leadership’s commitment to that tone, as well as the culture throughout the organization.

Indeed, according to KPMG 2013 Global Audit Committee Survey, despite a global confidence of their oversight of the company’s financial reporting, most of the 1800 Audit committee members in many countries around the world are markedly less confident in their oversight of risk:

  • While 37% said their company’s risk management program is “robust and mature,” 45% said the program requires “substantial work.”

  • Only 25% said the company’s risk management process “extends far enough into the horizon.”

  • The quality of risk-related information—particularly about cyber risk, global systemic risk, and the pace of technology change—as well as hearing dissenting views from middle management and others about critical risks facing the company continue to be areas of concern,

  • 33% said they are not satisfied with the company’s crisis readiness and response plan,

  • Nearly 50% are only somewhat satisfied that the company’s governance activities are focused on the greatest risks to the brand.

According to KPMG , 4 main causes may explain those mitigated results about risk oversight :

  • digitalization

  • globalization

  • increased government regulation

  • global enforcement

Finally, KPMG’s 5 top Audit committee Responsibilities for 2013 are to :

1. Stay focused on the audit committee’s top priority: financial reporting and internal controls .

2. Reinforce audit quality and set clear expectations for the external auditor.

3. Monitor the impact of the business and regulatory environment on the company’s compliance programs.

4. Understand the company’s significant tax risks and how they are being managed.

5. Make sure internal audit is properly focused and fully utilized.

go to KPMG complete survey.

See complete KPMG’s audit committee priorities for 2013

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