One-third of the 1,800 audit committee members around the world who participated in a KPMG survey said they could do more to understand the key assumptions that lie beneath management’s accounting judgments and estimates.
In fact, less than half of those surveyed said they are satisfied that audit committees devote adequate agenda time to discussing the quality and consistency of nonaudited financial information. They generally worry about ongoing pressures — like meeting unrealistic budget targets or analysts’ earnings estimates and forecasts — that pose significant risk to the integrity of financial statements. Audit committee members are being nudged on various fronts to up their game in understanding financial statements and evaluating auditors.
