Regulation, uncertainty and volatility are the top concerns of members of audit committees worldwide, according to a recent survey by KPMG.
The audit committee’s job continues to grow more difficult. Nearly half of committee members surveyed by KPMG indicated that, given their expertise and heavy agenda, it is “increasingly difficult” to oversee major risks, risk-management processes and global compliance, besides the committee’s core responsibilities.
The risks include cyber risk and IT.
Term Techasarin, a partner, advisory, at KPMG Phoomchai Business Advisory, said the responses from Thai audit committee members participating in the survey were in line with those of their peers in other countries. It is the first time the survey has included Thai companies. KPMG sent the surveys to 70 Thai customers, totalling 200 audit committee members, of whom 27 members responded.
The surveyed was conducted late last year on nearly 1,500 audit-committee members from companies in 34 countries. It asked them to identify their pressing challenges and concerns.
While audit committees rate much of the information they receive about key risks facing the company – legal/regulatory compliance, operating risk, public policy developments – as “good” or “generally good”, many say information about cyber security, emerging technologies and the company’s growth and innovation plans needs improvement.
Audit committees want to better understand a company’s global systemic risks and supply chain dependencies.
Lack of succession plan
Most companies don’t have a chief financial officer (CFO) succession plan in place. Only about 40 per cent of respondents said their company has a formal succession plan for the CFO –and clear performance objectives to evaluate the CFO’s performance.
Audit committees would like to see the CFO contributing more to a company’s strategy and risk management efforts, as well as “developing talent and bench strength”. More than 80 per cent of respondents said internal audit’s role should extend beyond the adequacy of financial reporting and controls to include other key risks facing the business.
However, only half said internal audit has the skills and resources to be effective in the role they envision.