Many audit committees concede some specific issues and processes could be improved -- including oversight of accounting judgments and estimates, risk management and agenda setting, according to a recent survey by the Audit Committee Institute of KPMG International.

"With Section 404 compliance processes largely in place, we're seeing audit committees refocusing their agendas on additional oversight issues and activities they feel are most important," said the institute's executive director Kenneth Daly, in a statement. The group conducted the survey with the National Association of Corporate Directors.

Of the 317 audit committee members polled, about 70 percent rated their committee as "very effective." But nearly one in three said that they were not fully satisfied with the committee's oversight of management accounting judgments and estimates, while another 80 percent said that they weren't fully satisfied with oversight of risk management.

About one in three respondents said that there was no clearly defined process for assigning risk oversight responsibilities among the board and its committees, and more than half believed the audit committee should not have primary responsibility for oversight of the company's risk-management program.

"There continues to be a general lack of understanding and clarity about roles and responsibilities in this evolving area of oversight," Daly said.

Roughly one in three respondents said support from the chief executive, external audit partner, in-house and external legal counsel, corporate secretary and the full board could be better. "What we're seeing in these survey results is a combination of healthy skepticism, with audit committees asking more probing questions about critical areas of oversight, and a real need to continue strengthening the financial reporting process overall," Daly said.

Founded in 1999, KPMG's ACI communicates with thousands of directors and corporate officers every year through roundtables, conferences, publications and online resources. More information about the institute, and the survey, is available at www.kpmg.com/aci.

Previously on WebCPA:

PwC Study: Continuous Auditing a Growing Trend (June 28, 2006)

New Risk Assessment Standards Get 'Back to Basics' (June 15, 2006)

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