CFOs and Audit Committees Will Soon Feel the Heat: FEI Canada Study
Risk, market turmoil and standards setters expected to add pressure means CFOs need to help board directors, and audit committee members in particular, better understand the business challenges that their organizations are facing
TORONTO - Canadian financial executives believe greater concern around risk management will increase demands on audit committees in the next 24 months, resulting in heightened pressures on company CFOs. Participants in a new research study by the Canadian Financial Executives Research Foundation (CFERF), point to the turmoil in the capital and debt markets to explain this renewed emphasis on risk management. The CFO and the audit committee study is sponsored by KPMG LLP.
The CFO and the audit committee study highlights include:
-- Organizations expected to be at the forefront of increased demands on
audit committees include accounting standards setters and securities
-- 90 percent of respondents reported the CFO of their organization had an
excellent relationship with the company's audit committee, a
relationship that is based on trust and transparency
-- 69 percent of respondents were happy with the approach of their audit
committees, reporting the committees are neither over-involved nor
-- 83 percent disagreed with the suggestion that the CFO has an 'us versus
them' relationship with their audit committee
"The study shows that CFOs need to help board directors, and audit committee members in particular, better understand the business challenges that their organizations are facing, while demonstrating the fortitude to withstand the oversight of their performance by the audit committee," said Michael Conway, Chief Executive and National President of FEI Canada.
Despite this increased scrutiny from the audit committee, overall, financial executives are confident when fielding tough questions and engaging in difficult conversations at audit committee meetings. A majority also agreed that their audit committee members request information in a reasonable time frame.
"The nature of the CFO-audit committee relationship is clearly of strong interest to financial executives," said Todd Buchanan, National Leader, Accounting Advisory Services, KPMG LLP. "The study shows that successful audit committee relationships feature trust, respect, professionalism, collaboration, openness and transparency."