Market turmoil marks turnaround of priorities for internal audit committees, says survey
LONDON – Risk management is now the top priority for audit committee members, considered ahead of traditional accounting judgement and estimates and internal controls as the credit crunch continues to bite, according to the yearly annual Audit Committee Member Survey conducted by KPMG’s Audit Committee Institute (ACI).
The survey of almost 150 UK audit committee members of public companies, and more than 1,000 audit committee members globally, on their perspectives and priorities for the year ahead, revealed less than half of audit committee members, at 46%, were very satisfied that their company had an effective process to identify the potentially significant business risks facing the company, and even fewer, at only 38%, were very satisfied with the risk reports they received from management.
Tim Copnell, ACI head in the UK, said that recession-related risks as well as the quality of the company’s risk intelligence were two of the major oversight concerns for audit committee members. “But there is also concern about the culture, tone and incentives underlying the company’s risk environment, with many saying the board and/or audit committee needs to improve their effectiveness in addressing risks that may be driven by the company’s incentive compensation structure,” he said.
More on Risk Management
This issue of The Journal of Risk Model Validation commences with a paper by Pilar Abad, Sonia Benito Muela and Carmen López Martín entitled "The role of the loss function in value-at-risk comparisons",...
ABSTRACT We demonstrate how introducing economic variables into a credit scorecard improves the predictive power of that scorecard. Such a scorecard can forecast default rates accurately, even when economic...
ABSTRACT In this paper, we discuss the evolution of the financial economic events that preceded the triggering of the subprime crisis. This crisis shares similarities with episodes that occurred in the...
ABSTRACT This paper examines whether the comparison of value-at-risk (VaR) models depends on the loss function used for such a purpose.We showa detailed comparison for several VaR models for two groups...
Sign up for Risk.net email alerts
Oxford professor David Vines argues that the carrot is as important as the stick
Sponsored webinar: IBM
Watch highlights of this year's London conference
Operational risk and the challenges of defining and dealing with conduct risk
There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.