PracticeAuditAudit panellists say climate returning to ‘normal’: KPMG

Audit panellists say climate returning to 'normal': KPMG

KPMG reports audit boards say risk management is trumping shorter-term problems with financial statements caused by the economic upheaval

Audit committee members have said their focus is shifting away from heading
off problems in company accounts caused by the financial crisis.

Panellists approached by KPMG reported their agendas are returning to ”
normal”, pre-credit crisis conditions before the volatility which battered the
capital markets.

However KPMG’s Audit Committee Institute polled over 1100 audit committee
members, with more than 100 UK respondents, finding “normal” conditions now
included an overwhelming emphasis on risk management.

Asked which areas of oversight were most important, 70 per cent said risk
management was top of the list.

40 per cent of panellists opted for financial statements issues as their
second choice.

KPMG said forecasting was the top area outside the financial statements that
UK audit committees were seeking assurance over (53 per cent of respondents),
with regulatory compliance the number two priority (37 per cent).

“The legacy of the economic downturn is clear to see,” said Timothy Copnell,
associate partner at KPMG in the UK and director of the Audit Committee
Institute.

“A return to normal is in fact a return to a ‘new normal’ – in which
companies and audit committees need to be perpetually alive to potential risks
and economic threats.”

“The extreme volatility of the past couple of years may have subsided, but
audit committees have clearly learned the lessons and their way of working may
in fact never be the same again,” Copnell added.

Further reading:

KPMG
chief calls for audit reform

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