UK finance directors are split as to whether the quality of financial reports could have suffered because non-accountant members of audit committees do not receive adequate training.
The latest Accountancy Age/Reed Accountancy Big Question survey found strongly-opposed opinions among FDs – 47% said that financial reporting could have suffered due to under-trained audit committee members, while 36% disagreed.
Last week the FRC’s Public Oversight Body for Accountancy published a consultation document that claimed better training and education of ‘accountants, auditors and members of audit committees’ will lead to increased public and investor confidence in financial reporting.
Survey respondents couldn’t understand how audit committee members could serve without any training. ‘I’ve seen financial reporting suffer,’ said one finance director.
‘I believe everyone needs training on company financial reporting, not just non-accountant members,’ said Dominic Vitoria, FD of C&D Technologies.
Sauter Automation FD John Buckley argued that ‘a well-trained non-accountant can ask more penetrating questions of the accountants’, but warned that the whole process should not rely on its success on non-accountants’.
Others claimed that the level of training among non-committee members is adequate enough. ‘Having non-finance people making comments in financial reports probably adds more value than not. Finance people can sometimes be too snowed under with adherence to rules and regulations that they miss the big business issues,’ according to one respondent. Bryan Armour, FD of Parchment Housing Group, said that his auditors and accountants should ensure reports meet current standards, while other committee members should ‘make sure they make sense’.
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