In 2007 KPMG completed its annual global survey of board audit committees, finding that many committees are still striving to improve their effectiveness.
The evolving role of audit committees arises from the fact that market economies share two imperatives: the integrity of financial reporting and investor confidence. One follows the other. Audit committees are on the front line when it comes to the integrity of financial reporting.
Our survey covered more than 1300 members of audit committees (or equivalent supervisory bodies) around the world. While many of these respondents believed their committees were 'very effective', nearly half rated their committees as only 'somewhat effective' or in 'need of improvement'.
These responses reflect the continuing evolution of the audit committee function. As its general oversight role becomes more demanding, the audit committee has to grapple with complex issues such as risk management, internal controls, accounting judgments and estimates and IT governance.
The bar just keeps getting higher.
Although it discovers some big regional variations, our survey shows that audit committees are adapting successfully to a changing commercial and regulatory environment ― but not without difficulty in many cases