Audit committees continue to express confidence in their oversight of core responsibilities—financial reporting integrity and audit quality.
Yet, it’s clear from our survey of more than 1.300 audit committee members that technological innovation, digital disruption, and the complexity of business are exerting greater pressure and sharpening the focus on risk management and the internal control environment.
Indeed, mounting regulatory compliance risk and transformative technologies—data analytics, artificial intelligence (AI), automation, and blockchain—are increasing the demands on the finance organization, internal audit teams, and enterprise risk management (ERM) systems.
As companies and their boards grapple with a fast-changing world—globally connected, data-driven, and often opaque—audit committees continue to play a pivotal role in assessing risk management processes and internal controls. Is the tone at the top clear? Does leadership walk the talk? What is the mood in the middle and the buzz at the bottom? Does the company’s culture make it safe for employees to do the right thing?
Not surprisingly, our survey finds many audit committees still shouldering heavy risk agendas—financial risk, legal/regulatory compliance, cybersecurity, information technology, and third-party risks. Does the audit committee have the time and expertise to oversee these major risks?
Audit committee members continue to tell us that a deeper understanding of the business and its risks and more “whitespace time” for open dialogue would most improve the committee’s effectiveness. Clearly, that puts a premium on effective agenda management.
We hope you find these survey results helpful in sparking robust discussions with your audit committee, board, and management as you work to keep pace in a fast-changing environment—and on course for long-term performance.
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