Business

Wednesday May 13, 2009

Audit group urges framework to monitor financial reporting process

By DANNY YAP


PETALING JAYA: It is imperative for the audit committee to focus on a process that supports effective oversight, in view of the challenging corporate governance landscape, says Audit Committee Institute (ACI) Malaysia chairman David Lim.

He said that to support effective oversight there was a need to develop a framework that facilitated the coordination of activities and information to support the committee’s understanding and monitoring of a company’s financial reporting process. ACI Malaysia is sponsored by KPMG Malaysia and it represents an institute with a mission to communicate with audit committee members on ways to improve their awareness, commitment and implementation of effective audit committee processes.

Lim, who is also KPMG audit partner, said ACI Malaysia would engage in a variety of initiatives to assist audit committee members by providing a range of resources through its websites, publications and roundtables – all designed to facilitate the exchange of views and insights on audit committee best practices and processes and other topics of relevance.

“This year’s roundtable discussions themed ‘Economic Downturn and Risk Oversight: Reassessing Risk in the Wake of Market Turmoil’ are focused on the recent credit crunch resulting in the financial crisis extending beyond Wall Street and the financial sector. Companies and boards are seriously taking a hard look at the array of risks facing their companies,” he noted.

Lim said in tough times like now many boards and audit committees were not only sharpening their focus on these risks - they are also reassessing how companies managed their risks. He said the topic of risk management oversight this year had a strong focus on the audit committee’s role and responsibilities.

“Members of the audit commmitte have a professional duty and responsibility to stakeholders to ask the board of management tough questions,” he said, adding that corporate culture of fearing the tone at the top should be dismissed.

KPMG partner (internal audit, risk and compliance services) Lee Min On said the audit committee now faced a formidable task to effectively oversee a company’s financial reporting process and exert sufficient oversight independently.

  • E-mail this story
  • Print this story