The annual survey cited the increasing difficulty of audit committees being asked to oversee major risks such as cyber security; a growing myriad of global compliance requirements and political risks; and challenges in financial reporting.
Nearly a quarter of the respondents said the time required to carry out their audit committee responsibilities has “increased significantly,” and half said the job continues to grow more difficult given the committee’s time and expertise.
“The resounding message is that the audit committee can’t do it all,” Dennis T. Whalen, partner in charge and executive director of KPMG’s Audit Committee Institute, said in a press release.“Overseeing financial reporting and audit is a major undertaking in itself, and the risk environment is clearly straining many audit committee agendas today.”
One positive development is that more boards are shifting some oversight responsibilities to other directors not on the audit committee, so that audit committees can have “more time for quality discussions and a deeper understanding of the business,” Whalen said.
One thing audit committees do want to do more of is delve into the finance department’s work, including financial risk management, capital allocation, tax, and debt.
KPMG noted additional growing concerns among audit committee members worldwide:
- The quality of risk information needs to improve, particularly on cyber security and technology risk, talent and innovation, and business model disruption;
- Organizations need to beef up their readiness to respond to loss of critical infrastructure, including financial systems, telecommunications networks, transportation, and energy/power;
- Chief information officers could improve their interactions with audit committees; and
- Organizations need to work on better succession planning for audit committees.
The survey tapped 1,500 audit committee members in 36 countries.