Research - 03.02.2011 - 00:00
4 February 2011. The empirical study provided the St.Gallen academics Prof. Dr. Thomas Berndt und Christian Offenhammerwith a profound insight into the current modus operandi of audit committees. The publication of the survey in the form of an opinion paper entitled EinBlick in die Zukunft – Entwicklungenfür Audit Committees in der Schweiz [A glimpse into the future – developments for audit committees in Switzerland] contains information about the composition, responsibility, resources and diligence of audit committees. The study is based on statements made by 116 audit committee members from 107 Swiss enterprises. In the case of certain questions, the survey subjects the practices of audit committees of financial institutions to particular scrutiny.
Higher degree of independence
Audit committees monitor companies’ financial situation and in this way support the board of directors. According to the survey, audit committees are becoming increasingly more professional. About 80 per cent of audit committee members are completely independent and fulfil no executive functions. In addition, they are not financially tied to the firm: 85 per cent receive no fixed remuneration. Audit committees increasingly deal with extended activities and duties, thus turning into comprehensive audit, risk & compliance committees.
Changed role in Switzerland
The quality of an audit committee’s work depends on the quality of the information that is made available to it. A committee should therefore have access to all relevant management information at all times. As little as ten years ago, audit committees were largely unknown. Today, board committees often delegate the statutory monitoring functions in the fields of accounting and auditing to audit committees.
Foto: wagg66 / photocase