By Peter Uzoho
Professional financial services and advisory firm, KPMG has advisedÂ members of the audit committee of organisations to be more effectiveÂ in carrying out their oversight functions on their organisationsâ€™
Speaking at the KPMG Audit Committee Seminar for Shareholders in
Lagos,Â theÂ Partner, Audit Services, KPMG, Nneka Eluma,Â said auditÂ committee members should ensure that financial statements show
accurately,Â companiesâ€™Â affairs
Eluma while discussing the topic:Â â€œAnalysis and Interpretation ofÂ Financial Statements Including Regulatory Updates,â€Â stated that for
the committee members to be able to discharge such critical functions
effectively, they need to haveÂ deep understanding of the business of
â€œIfÂ they will understand the business, they will thenÂ understand the contents of the financial report and then ask excitingÂ questions on them,â€ Eluma said.
SheÂ explained thatÂ a companyâ€™s financial statements has five main components
which include statements of financial position, notes to financialÂ statements, statements of cash flow, statements of profit or loss and
comprehensive incomeÂ and statement of changes in equity.
Also contributing, another Partner at the KPMG Audit Services, Mr. Ayo
Soyinka said that audit committee members should ascertain whether the
accounting and reporting policies of the company are in accordance
with legal requirements and agreed ethical practices.
â€œReview relevant regulatory returns filed and disclosures made by theÂ company; review companiesâ€™ semi-annual and annual financial
statements,â€ Soyinka said.
Soyinka who spoke on â€œCorporate Governance Roles and Responsibilities of the Audit Committee,â€ urged the committees to have their meetings
regularly as required by their roles and responsibilities.
â€œIt is recommended there shall be no fewer than three meetings duringÂ the year, held to coincide with key dates within the financial reporting and audit cycle,â€Â he added.
He outlined the agenda of the audit committee meetings to includeÂ evaluation of the internal and independent audit process;Â assessing
processes relating to control environment; oversee financialÂ reporting; risk management and compliance, among others.
Soyinka listed the top 10 risks confronting companies which auditÂ committee members should look into.
They include: long term value creation and the companyâ€™s role in the society, connecting strategy and risk, innovation, talent management and inclusion. OthersÂ according him are cyber security, boardroom composition, corporate culture, shareholder engagement, and regulation.
He also drew the audit committeeâ€™s attention to its action plan forÂ 2018 which comprised: staying focused on their fundamental functions;Â monitoring implementation of new standards, impacts of business and regulatory environment, among others.