Audit committees across the globe cited economic and political uncertainty and volatility, regulatory compliance, and operational risk as the greatest challenges for companies in the year ahead, according to a new survey from KPMG.

The survey, of 1,500 audit committee members in 36 countries, found for the second consecutive year that the respondents said it is increasingly difficult, given the audit committee's time and expertise, to oversee major risks in addition to financial reporting.

Three out of four of the committee members surveyed said the time required to carry out their audit committee responsibilities has increased significantly (24 percent) or moderately (51 percent), and half said the job continues to grow more difficult given the committee's time and expertise.

Many audit committees said they have at least some responsibility for significant aspects of risk oversight—in addition to financial reporting—such as cybersecurity and technology, global compliance, and operational risks, or the company's risk processes generally.

“The resounding message is that the audit committee can't do it all,” said Dennis T. Whalen, partner in charge and executive director of KPMG's Audit Committee Institute in a statement. "Overseeing financial reporting and audit is a major undertaking in itself, and the risk environment is clearly straining many audit committee agendas today."

Asked which issues will require more attention in 2015, survey respondents cited cybersecurity and the pace of technology change, risk management and operational risk, and regulatory compliance.

"A positive development is that more boards are reassessing or reallocating risk oversight responsibilities to better balance the workload," said Whalen. More than one-third of boards have recently reallocated risk oversight duties among the full board and its committees (up from 25 percent last year), and 32 percent said they may consider doing so in the near future.

"A lighter risk agenda for the audit committee can translate into more time for quality discussions and a deeper understanding of the business," he said.

While audit committees continue to express confidence in their oversight of the company's financial reporting and audit, the KPMG survey identified a number of ongoing challenges and concerns. For example, the quality of risk information is falling short—especially on cybersecurity and technology risk, talent and innovation, and business model disruption.

The survey also found that a company's readiness to respond to loss of critical infrastructure—financial systems, telecommunications networks, transportation, energy/power—may require more attention. Among senior leaders of the business, the CIO ranks lowest in terms of quality interaction and communication with the audit committee, according to the survey respondents. CFO succession planning continues to be a major gap, with many audit committees ranking themselves lowest in this area.

Many audit committee members say they want to dive deeper into the finance organization's work, including financial risk management, capital allocation, tax, and debt. Survey respondents said the internal audit function could deliver greater value to the organization. In addition, they believe external auditors could better support the audit committee by sharing industry-specific insights and views on the quality of the company's financial management team.

In the U.S., audit committees continue to express confidence in their oversight of financial reporting and audit, although cybersecurity and the pace of technology change were cited as particularly challenging issues requiring greater attention in the year ahead.

Assessing their overall effectiveness, audit committees around the world said they would most benefit from a better understanding of the company's strategy and risks; more "white space" time on the agenda for open dialogue; greater diversity of thinking, perspectives, and experiences; and technology expertise on the committee.

KPMG's 2015 Global Audit Committee Survey is available here.

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