About 67 per cent audit committee members from India think uncertainty and volatility in economic, regulatory and political conditions are greatest challenges for companies in the country, says a report.
According to a survey report by global consultancy major KPMG, government regulation, compliance and cybersecurity were also viewed as major challenges.
“Audit committee members around the world, including 67 per cent from India, identified uncertainty and volatility (economic, regulatory and political) as a risk posing the greatest challenge for companies”, it said.
“Clearly, a slowing global economy, the flare up of geopolitical hotspots, and the proliferation of major cyber breaches have intensified the spotlight on these issues”, the report added.
The report also revealed that only 40 per cent of audit committee members in India have the time and expertise to oversee major risks in accounts, while globally, the figure stood at 52 per cent.
“This is because the audit committee has too much on its plate, especially after the Companies Act, there is an increased focus on monitoring auditors’ independence and performance, approval of related-party transactions, scrutiny of inter-corporate loans and investments, valuation of undertaking/assets, etc”, KPMG said.
It further said that in the country, only 52 per cent of those surveyed are entirely satisfied with the value that the internal audit function adds.
“The respondents expect internal audit to be a crucial voice on risk and control matters from financial reporting and compliance issues to key operational and technology risks facing the business”, the report said.
“While the audit committees are confident when it comes to financial reporting oversight and audit quality; new regulations, rising business complexities, increasing risk volatility and growing investor scrutiny are stretching audit committee agendas”, said KPMG in India Head of Risk Consulting, Mritunjay Kapur.
KPMG surveyed 1,500 audit committee members across the globe for the report.