THE NUMBER of audit committee chairs who have previously held CFO roles has more than doubled in the last decade, according to a new survey.
The survey of 800 CFOs found that 71% of audit committee chairs in the UK have held the top finance job at a company, up from 35% ten years ago, as a result of the demands of a far more complex risk and regulatory environment.
CFOs also viewed the position as the most realistic non-executive destination, followed by the risk committee, remuneration committee and finally membership of the nomination committee.
Hywel Ball, Ernst & Young UK&I assurance managing partner, said: “Accounting standards are moving at an incredibly rapid rate, investor activism is on the rise, and companies face an extremely complex risk and regulatory environment. All of these trends increase pressure on audit committee members and make it more difficult for those with a non-finance background to perform the role.”
However, the report found that many CFOs believe the risk to their own personal reputation is too great to take an external role, particularly as an audit committee chair – with subsequent financial difficulties or accounting irregularities potentially damaging the CFO’s reputation and career prospects.
David Grigson, chairman of Trinity Mirror, and former CFO of Reuters and Emap, said: “I would be wary of taking a board position purely because somebody was thinking, ‘I’ve got a vacancy on my audit committee, I need a finance director.’ Basically, they’re saying that they’re going to undervalue my broader contribution and if that’s the case, then it’s probably not a board I want to be on.”
Former chief executive of HMRC Dame Lin Homer has been appointed to the ICAS council as a public interest member
Simon Wright of CareersinAudit.com discusses how an effective cyber defence force is critical to businesses worldwide and how internal auditors can make the transition to a new career in cyber security
The FRC has said that the investigation will 'consider, but not be restricted to, issues regarding misstated accounting balances'
Craig Maxwell joins the audit and assurance team in Scotland