CGMA Magazine, otherwise known as Chartered Global Management Accountant, has reported this month its ingredients of effective audit committees (AC) following its panel at the 2014 World Congress of Accountants in Rome. The key message was the need for a blend of skills and expertise for AC members, including risk, technology, and operations and underscore the need for continuing education. Other key areas of focus include:
- Communication - reflecting the need of the chair to effectively engage members of the AC, the board at large, the CEO, and external auditors and other service providers,
- Independence - the need for members that are truly independent of of company operations,
- Remuneration - the compensation of AC members needs to not too high nor low to balance indepdendence, and
- Empowerment - have the power to use thier independence in order to exert influuence on the company.
From my own personal perspective, a good understanding of the financial statement policies are important given the growing complexity of audit and financial statement preparation. Lastly, I also
think direct access by AC members to the external audit and risk staff is key given the growing demands on board members, in large companies and financial institutions. Check out this journal at www.cgma.org.
think direct access by AC members to the external audit and risk staff is key given the growing demands on board members, in large companies and financial institutions. Check out this journal at www.cgma.org.
Comments
Post a Comment