Four Critical Challenges for Global Audit Committees

Minakshi Bindhani

09 Mar, 2023

The global audit is connected with the organisation across the countries. It operates multifaceted cyber security risks, legal and compliance environments, and integrated supply chains which require the audit committees to understand better that global audit to ensure that the organisation is built to operate in this business environment globally. It is a difficult challenge for the audit committee shares with the entire board. Global  committees reassess whether they have the right experience and enough time to leverage resources to gain a better understanding of certain future risks and engage in global travel, connect with the people on the ground and oversee risks (and reallocate oversight responsibilities as appropriate),

The risk of corruption and fraud tends to increase the capital value and opportunities in new markets, leverage new data and technologies and engage with more supply chain operations globally. Factor in the Corrupt Practices Act, the Securities and Exchange Commission’s whistleblower programme in every country sheered up the volume and scope of new regulations. New compliances like Twitter, YouTube and Facebook have effectively put every company in a position where the company’s culture, values and brand reputation are on display worldwide. The international audit committee’s engagement is more critical.

Four key challenges facing global audit committees today

• Culture
  It is critical to be successful every global company to establish safety, a non-negotiable set of global values around compliance and how the organisation treats people. Keys to meeting this cultural challenge are tone at the top of the foreign operation, accountability and control built into the organisational structure, upfront communication, and proper incentives and rewards.
• Talent in the finance organisation
  In an organisation, quality financial reporting starts with the CFO but requires a strong team in the company’s markets, supported by traditional corporate roles like controller, chief accountant, internal audit, and treasury functions. The right people, both local and expatriates, and their ability to work together seamlessly ensure the organisation builds an understanding environment.
• Maintain a sound global control environment
  With supply chain operations globally, it is challenging to maintain a sound global control environment, and it operates across different cultures and legal frameworks. Global corporations faced more significant challenges in addressing the increased risks, e.g., fraud and corruption, financial reporting and internal controls, inferior product quality, and corporate responsibility issues, such as sustainable environmental practices and human rights, and fair labour standards.

Legal and regulatory compliance

A critical role of an international audit committee ensured that the company’s ethics and compliance programs keep pace with globalisation, technology, and new business models. The risk of corruption and fraud tends to leverage new data and technologies, engage with more vendors and third parties across longer supply chains^[1] and increase when companies move quickly to capitalise on opportunities in new markets.

Factor in the Foreign Corrupt Practices Act and the Securities and Exchange Commission’s whistleblower program in every country’s sheer volume and scope of new regulations. Therefore, legal compliance is a top challenge to face. Facebook, Twitter, YouTube, and have effectively put every company in a position, so the company’s values, cultural commitment to integrity, legal compliance, and brand reputation are on display globally.

Conclusion

The global audit committees faced challenges like financial reporting, oversight, risk, and effectiveness are critical challenges for audit committees. Given these challenges, the committee helped to identify the pressing challenges and surveyed them by visiting company locations worldwide, talking to people in their offices and workplaces, and developing the organisation’s culture, talent, controls, and more.

Also Read: Audit Committee Requirements under Companies Act 2013