David Jetuah, Accountancy Age, Thursday 29 July 2010 at 16:06:00

KPMG reports audit boards say risk management is trumping shorter-term problems with financial statements caused by the economic upheaval

Audit committee members have said their focus is shifting away from heading off problems in company accounts caused by the financial crisis.

Panellists approached by KPMG reported their agendas are returning to " normal", pre-credit crisis conditions before the volatility which battered the capital markets.

However KPMG?s Audit Committee Institute polled over 1100 audit committee members, with more than 100 UK respondents, finding "normal" conditions now included an overwhelming emphasis on risk management.

Asked which areas of oversight were most important, 70 per cent said risk management was top of the list.

40 per cent of panellists opted for financial statements issues as their second choice.

KPMG said forecasting was the top area outside the financial statements that UK audit committees were seeking assurance over (53 per cent of respondents), with regulatory compliance the number two priority (37 per cent).

"The legacy of the economic downturn is clear to see," said Timothy Copnell, associate partner at KPMG in the UK and director of the Audit Committee Institute.

"A return to normal is in fact a return to a ?new normal? ? in which companies and audit committees need to be perpetually alive to potential risks and economic threats."

"The extreme volatility of the past couple of years may have subsided, but audit committees have clearly learned the lessons and their way of working may in fact never be the same again," Copnell added.

Further reading:

KPMG chief calls for audit reform