Source: Bdaily Businessnews

Risk management and crisis readiness pose the most significant challenges to companies according to KPMG’s Audit Committee Institute survey.

Four in ten (39%) UK audit committee members say their company’s risk management programme requires “substantial work,” with cyber security a particular concern.

Just over a third of audit committee members are fully satisfied that their company’s risk management process is dynamic enough to cope with a rapidly changing environment due to new technology and social media risks.

And when it comes specifically to the quality of information that audit committees receive about critical cyber risks facing their company, 80% of members are dissatisfied.

Meanwhile, anti-bribery laws have become a significant area of attention with over three quarters of UK audit committee members increasing their focus on the issue.

David Morritt, head of audit at KPMG in Leeds, says: “Technology, globalisation and government regulation are dramatically reshaping the business and risk environment, with audit committees coming to terms with the higher regulatory expectations placed upon them.

“These findings highlight the challenges of keeping ahead of the ever-increasing range of risk oversight falling within their remit in a fast-moving risk environment.”

Audit committees also have concerns around annual reporting. Just over half (56%) of UK members are fully confident that their company’s annual reports present an understandable picture of their company’s position – though higher numbers are satisfied that the reports are “fair” and “accurate”, perhaps highlighting the challenges of effectively communicating complex information.

While audit reform measures are debated in the European Union and elsewhere, four in five audit committee members do not believe that mandatory auditor rotation would improve audit quality.

There are high levels of satisfaction with the quality of external audit in the UK, at 86%, but more mixed views on internal audit.

Only 48% are fully satisfied that internal audit delivers the value to the organisation that it should, and a third (32%) say that the internal audit plan could more effectively focus on critical risks.

Meanwhile, sustainability and CSR issues ranked relatively low down audit committees’ priority list; one in three (34%) of UK respondents do not discuss sustainability or CSR issues at all and over four in ten (42%) do so only “periodically”.