(MENAFN - The Peninsula) Audit committees around the world have highlighted that it is becoming increasingly difficult to oversee major risks in addition to financial reporting due to heavy workloads, according to KPMG's 2014 global audit committee survey.
CFO succession and risk oversight are also key challenges as companies face increasingly complex regulatory and operating environments. KPMG interviewed 1,500 audit committee members in 34 countries.
Although the survey found that many audit committees have primary responsibility for a number of critical risks facing the company such as legal/regulatory compliance, anti-bribery/corruption, financial, and/or IT and cyber security risks 43 per cent said it is becoming "increasingly difficult" to oversee those risks.
Jeyapriya Partiban, Partner, Risk Consulting, at KPMG in Bahrain said: "Audit committee agendas are not getting any lighter. Overseeing financial reporting and audit, and ensuring those activities have the right resources and talent, is a job in itself. This survey suggests that perhaps it is time to step back and assess whether the audit committee's risk oversight responsibilities are adequate and appropriate."
While audit committees are satisfied with much of the information they receive about key risks facing the company, nearly one in three said information about cyber security, emerging technologies, and the company's growth and innovation plans "needs improvement."
Jeyapriya added: "An overloaded audit committee is a less effective audit committee. Boards and management teams should assess the adequacy of their governance processes in critical areas. Companies need to be better prepared to respond to significant regulatory change, ethics and compliance issues, business model disruption, and major technology developments."
The survey found 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 50 percent said internal audit currently has the skills and resources to be effective in the role they envision. Only 62 percent said they are satisfied the company has identified "leading indicators" that show where the company is headed and whether its strategy is on track.
The top challenges facing companies are: uncertainty and volatility; operational risk; human resources; technology change; business model disruption; cyber risk; and innovation.