About 89 percent of the 150 audit committee members at a recent KPMG conference said that the financial crisis had caused their company’s board or audit committee to change the nature and scope of its oversight.
In addition, 53 percent of the audit committee members and leaders at KPMG’s Audit Committee Issues Conference said that they are only or not satisfied that their board exercises appropriate skepticism about management’s risk perceptions and assumptions.
Fifty percent said that they are only somewhat or not engaged in discussing the assumptions that underlie management’s accounting judgments and estimates that might be impacted by the financial crisis, while 38 percent said that they are only somewhat or not satisfied that management has timely and accurate financial forecast information about earnings and cash flow.
In addition, 31 percent of the representatives from those companies that issue earnings guidance said that the audit committee has reconsidered the company’s policies regarding earnings guidance in light of the financial crisis.
Attendees were also asked to identify the issues that caused them the greatest concern in 2009. The top five were:
1. Liquidity, access to capital and cash flow;
2. Risk management;
3. Financial statement issues;
4. Maintaining internal controls; and,
5. Alignment of business goals, incentives, culture, compliance, controls and risk.
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