PHOTO
Compliance, cyber security, internal controls also high on agendas
Qatar – More than 40 percent of audit committee members surveyed recently say their risk management programs/processes require “substantial work,” and a similar percentage say that it is increasingly difficult to oversee major risks, according to a new report from KPMG’s Audit Committee Institute.
“In Qatar and elsewhere, there is increasing pressure on businesses to ensure that risks are well managed and that the complexity of local and global market conditions are taken into account” said Issa Habash, Risk Consulting Partner at KPMG in Qatar. “The audit committee’s job isn’t getting any easier. The findings in our report reinforce the practices and priorities that are essential for audit committees to keep pace – starting with having a solid understanding of the business and the critical risks it faces.” Habash added.
While audit committees in general express confidence in financial reporting and audit quality, they rank legal/regulatory compliance, cyber security risk, company controls around risk, and tone at the top and organizational culture as among their top challenges in ACI’s 2017 Global Audit Committee Pulse Survey.
Habash continued: “With growing regulatory requirements on businesses (IFRS 9 and the upcoming launch of VAT in the GCC), and ever mounting threats to cyber security, businesses are wise to plan and prepare early to identify gaps and opportunities in existing processes”.
KPMG surveyed more than 800 audit committee members and chairs in 42 countries, including Qatar, providing insights that audit committees around the world can use to sharpen their focus, benchmark responsibilities and practices, and strengthen oversight.
Overall, audit committees are largely satisfied that their agendas are properly focused on legal and regulatory compliance issues, maintaining internal controls over financial reporting, and key assumptions underlying critical accounting estimates. However, they see room for improvement when it comes to focusing on CFO succession planning, talent and skills in the finance organization, tone at the top and culture, and aligning the company’s short- and long-term priorities.
Nearly 4 in 10 said the committee’s effectiveness would be most improved by having a “better understanding of the business and key risks,” while nearly a third said additional expertise related to technology or cyber security would be helpful.
The report highlights six key takeaways:
· Risk management is a top concern for audit committees.
· Internal audit can maximize its value to the organization by focusing on key areas of risk and the adequacy of the company’s risk management processes generally.
· Tone at the top, culture, and pressure for short-term results are key challenges – and may need more attention.
· CFO succession planning and bench strength in the finance organization continue to be weak spots.
· Two key financial reporting issues may need a more prominent place on audit committee agendas: Implementation of new accounting standards and non-GAAP financial measures.
· Audit committee effectiveness hinges on understanding the business.
Read the 2017 Global Audit Committee Pulse Survey.
-Ends-
About KPMG’s Audit Committee Institutes
Sponsored by more than 35 member firms around the world, KPMG’s Audit Committee Institutes provide audit committee and board members with practical insights, resources, and peer exchange opportunities focused on strengthening oversight of financial reporting and audit quality and the array of challenges facing boards and businesses today—from risk management and emerging technologies to strategy and global compliance.
About KPMG
KPMG is a global network of professional services firms providing Audit, Tax and Advisory services. We operate in 152 countries and have 189,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
KPMG in Qatar is a member firm of KPMG global network of firms. Established in the state of Qatar in 1977, the firm has been growing in stature and reputation ever since. KPMG in Qatar provides audit, tax, and advisory services to a wide array of clients operating in different sectors.
For more information, please contact:
Joanne Harris
Marketing and Communications Manager
KPMG in Qatar
joanneh@kpmg.com
+974 33878017
© Press Release 2017
