Audit Committee Quarterly Spring 2011

International Kpmg

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• Publié par: Isse
• Nombre de lectures: 15
• Langue: English

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1-ACQ Spring 2011 WEB 10-02-2011 11:17 Pagina 1
Audit Committee Quarterly
Spring 2011
Themes: Pensions, auditors
and the audit committee
Welcome 3
Signals 4
The audit committee
and the external auditor 6
Interview
Frans Cremers 9
Pensions and the audit
committee 12
Interview
Henk Scheffers 16
Ten to do’s for 2011 19
Current developments 211-ACQ Spring 2011 WEB 10-02-2011 11:17 Pagina 2
2 Audit Committee Quarterly – Spring 2011
About us
The Dutch Audit Committee Institute The Audit Committee Quarterly
(ACI) was set up by KPMG with (the ACQ) is designed to help keep
the aim of providing members of audit committee members abreast
audit committees with the required of developments and changes in the
knowledge and to offer a forum for corporate governance arena. The ACQ
exchanging knowledge and views will be distributed at the direct
while carrying out their tasks. request of audit committee members,
ACI follows developments in the supervisory board members, corporate
field of corporate governance in directors or other officers.
general, and audit committees in
particular, both in the Netherlands For more information on the work
and internationally. of ACI please click on our website
www.kpmg.nl/aci or contact:
The tasks, roles and responsibilities
of audit committees – but, no doubt, Audit Committee Institute
also the expectations of stakeholders – KPMG Accountants N.V.
appear to be constantly changing. P.O. Box 74555
ACI has therefore started a number of 1070 DC AMSTERDAM
initiatives to assist members of audit [e-mail]
committees. or tel. [phone]
ACI initiatives include roundtable
meetings, publication of the Audit
Committee Quarterly, conference
and board presentations, periodic
distribution of time-sensitive information
and a website.
© 2011 KPMG Accountants N.V.1-ACQ Spring 2011 WEB 10-02-2011 11:17 Pagina 3
Audit Committee Quarterly – Spring 2011 3
Welcome
Introduction to the Spring 2011 edition of the Dutch
Audit Committee Quarterly
Pensions, auditors and the audit criticism regarding the report of the employees and offer them insurance
committee supervisory board deserves some schemes with different investment
In this Spring issue of the Dutch Audit consideration. As the other article in profiles.
Committee Quarterly we present a this section about the Henri Sijthoff
mixture of practical and more reflective Prize shows, the annual report does The other theme under debate at the
material, including some personal not escape criticism either. moment is the relationship between
experience from two prominent the audit committee and the external
supervisory board members. To start For this Quarterly we have chosen two auditor. The audit profession is clearly
with the practical part: I hope the Ten themes that we think merit some extra in the politicians’ and regulators’
To Do’s for 2011 (pages 19-20) will be attention: firstly the way audit spotlight. It is as yet unclear whether
useful for audit committees, particularly committees deal with pensions and this will lead to new regulation,
when preparing the meeting about the secondly the working relationship affecting the ways audit committees
annual report. The article also contains between the audit committee and the and external auditors work together.
some other reminders concerning external auditor. My experience with Our article presents an overview of
important tasks of the audit committee. pensions is that in the analysis of the best practices and gives some
In Current Developments (pages 21- financial results, the impact of pensions suggestions to clarify and possibly
22) you will find the highlights of the is always eliminated because of its enhance the relationship between a
recent evaluation of the Corporate volatility. I think that pension risks, company and its external auditor.
Governance Code by the Monitoring precisely because of their volatile In the interview about this subject
Commission. I think especially the nature in case of defined benefit Frans Cremers, who sits on several
schemes, should be discussed at least supervisory boards and audit
once a year by the audit committee. committees, offers some very sensible
The article about pensions is followed comments and advice from his own
by an interview with Henk Scheffers, experience. What I find particularly
supervisory board and audit committee interesting is how he stresses the
member at numerous companies. importance of ‘boardroom fähigkeit’ of
Interestingly, Scheffers does not look the lead partner in his contacts with
at pensions as part of employment supervisory board members and
conditions, but views the present executives. I completely agree with
pension problems as reputation risks Cremers that an external auditor who
for the company, besides a financial understands the ‘boardroom language’
risk and a reporting issue. He advises and is not afraid to speak out, can be
companies that outsource pension more effective in his work and more
management and investment to pay valuable to the company.
close attention to the track record of
the pension investor. Also, they should Ben van der Veer
communicate proactively with their Chairman
© 2011 KPMG Accountants N.V.1-ACQ Spring 2011 WEB 10-02-2011 11:17 Pagina 4
4 Audit Committee Quarterly – Spring 2011
Signals
A selection of topics relevant for audit committees
COSO Seeks input on update of internal control
frameworks
COSO plans to take a fresh look at the Tabaksblat Code (NL) explicitly refer to concepts and guidance in the framework
framework in light of significant the COSO framework. COSO plans to will be refined to reflect the evolution
changes in the business and regulatory take a fresh look at the framework in of the operating environment along
environment over the past two decades. light of significant changes in the with changed expectations of regulators
business and regulatory environment and others with an interest in internal
Developed by the Committee of over the past two decades to see where control. It also expects the enhancements
Sponsoring Organizations of the it may need some updating. To start this to take into account more than just
Treadway Commission in 1992, the process, COSO has launched an online financial reporting needs, looking at
COSO framework is the generally survey, asking for a wide range of operations and broader compliance
accepted basis for establishing and stakeholders to say what they believe is objectives as well. The final framework
evaluating an internal control structure. still relevant in the framework, as well update is expected to be completed in
Among others, the Sarbanes Oxley Act as what's missing and what should be 2012. (www.coso.org)
(US), the Turnbull Report (UK) and the updated. COSO anticipates certain
COSO releases resources aimed at enhancing ERM programsecently published two new for Getting Started” describes successful “Developing Key Risk Indicators
papers to help companies that want to step-by-step efforts by companies to to Strengthen Enterprise Risk
get more serious about enterprise risk launch an ERM programme. The second Management,” it is intent to help
management. paper is targeted at companies that need management develop effective key
some focus on strengthening an existing risk indicators that will heighten
The first paper “Embracing Enterprise ERM programme with some tighter board and management awareness of
Risk Management: Practical Approaches focus on key risk indicators. Titled enterprise risk. (www.coso.org)
NBA: financial reporting of hospitals is under par
Financial reporting by Dutch health groep van Accountants, NBA) in its general and few reports provide a real
care institutions has several publication Het jaar 2009 Verslagen, insight into the risks facing the hospital.
shortcomings, says the Dutch which was published in January 2011. There is also room for improvement in
Institute of Accountants (NBA). The NBA has investigated all eight the governance information the hospitals
academic hospitals and all 83 general provide, in particular the information
Financial reporting of hospitals, hospitals in the Netherlands. Only two about the supervisory board (raad van
especially the information about risks of the 91 financial reports on 2009 give toezicht). At 30 percent of the institutions
and risk management is not up to an explanation of the internal risk the maximum terms for the supervisory
standard, says the Dutch Institute of management and control system. board positions are exceeded.
Accountants (de Nederlandse Beroeps- The information about risk is very (www.nivra.nl/NivraSite/Actualiteiten)
© 2011 KPMG Accountants N.V.1-ACQ Spring 2011 WEB 10-02-2011 11:17 Pagina 5
Audit Committee Quarterly – Spring 2011 5
IMF notes Companies forge stronger links
limitations in between executive pay and
AFM authority performance
in oversight Companies are toughening the and 41 percent expect to do so in 2011,
standards and enforcement of compared to just 26 percent in 2009.
over financial performance-based executive pay Companies also are more reluctant
programs for 2011. to allow incentive payouts unless
reporting performance targets are met: in 2010
As companies reassess many long-time only 18 percent of companies devi