Are the Boards keeping pace with the changing business environment and able to manage risks? The complexity of businesses and the use of technology would require the Governance processes, controls and risk management to be in the forefront of Audit Committee discussions and actions. The Audit Committee conference hosted by KPMG in 2012, identified the following as the Top 10 concerns for Audit Committees.
1 Governance processes, controls and risk management
2 IT risk & emerging technologies
3 Uncertainty- economic,political, social
4 Information privacy/security and cyber security
5 Fostering growth & innovation
6 Board composition/ skills/ expertise (IT)
7 Legal/ regulatory compliance
8 Leadership/ culture/ tone at the top
9 Tax risk
10 Interactions with auditors.
With increased pressure on financial reporting systems and the control environment, audit committees’ oversight role makes it more critical that the directors understand the complexities of business and the nature of risks to effectively challenge management.