audit committee and corporate governance. the european confederation of institutes of internal...
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Audit Committee and Corporate Governance
The European Confederation of Institutes of Internal Auditing (ECIIA)
• Founded in 1982
• Confederation of 32 countries
• Management Board from 8 countries
• No individual members only countries• Representing approx. 30,000 internal auditors
ECIIA Purpose
• To represent internal audit to European Union and any other European institutions of influence
• To promote the profession within the wider geographic area of Europe and the Mediterranean basin
Monitor the effectiveness of the company’s:- internal control,- internal audit where applicable- risk management systems
• Very broad assignment from risk identification to risk management and check of the efficiency of the internal control procedures
• Control organisation is complex
Board
Management AC
Centralized control Functions
IA
Field
How can the audit committee achieve its reinforced role ?
• The Audit Committee is ideally placed– It has free access to any individual, information, data– It can ask for external resources with management
agreement
• But :– It has limited member resources and time– It is very difficult to encompass a very large
organisation
What are some of the ingredients to be successful ? (1/2)• Build an Audit Committee with the right profiles
(skills & behaviours) and good understanding of the business
• Develop a strong interaction with Internal Audit• Review carefully the company risk mapping and
risk assessment• Get a sense of the risk culture in the field• Discuss with management out of formal
committees
What are some of the ingredients to be successful ? (2/2)• Be flexible – a yearly approach is out of date• Require well structured information from the
company• Build a network of Audit Committees in large
organisation to be closer to the business• Think in term of system, view all the risk
stakeholders as a combination
Key points
• Quality of individuals• Company culture• Internal audit link• Control system
A challenging new posture for Audit Committees