The remit of the audit committee includes providing effective oversight of key business areas to help the organisation be responsive to and navigate emerging risks and uncertainties. The ongoing Covid pandemic and the fallout from Brexit are just two of these uncertainties that appear to be with us for some time to come.
In this article, we outline some of the key issues that audit committees should include on their work plan in the coming year.
1. Business Continuity Planning
Business continuity planning has come to the fore during the pandemic as many organisations indicate that they “are testing the plan daily”. The audit committee should consider if the plan covers all relevant areas and has been robustly tested. This includes what to do if senior personnel are unavailable for an extended period of time and plans to ensure that there is adequate cover for same.
2. Cyber Security
Since the commencement of the pandemic, there has been a sharp rise in cyber related threats and cyber related breaches. Hackers are taking advantage of the distraction of the pandemic and remote working to expose weaknesses in organisations IT infrastructure. Audit Committees need to be aware of these threats and ensure that there are robust policies and procedures which should include cyber awareness training.
3. The Risk Register
New risks emerge all the time. It is important that the Audit Committee is clear as to how these are identified and included on the risk register. There should be appropriate controls in place to manage these risks and to report on the status of them at regular intervals.
4. Investment Returns
Many of the pillar banks are now charging negative interest rates on deposits. A key tool for organisations in managing this exposure is to have an appropriately documented treasury policy which outlines a medium to longer term liquidity and investment requirements.
5. Going Concern
Going concern continues to be a primary risk for 2020 audits. To satisfy the external auditors requirements, there should be strong forecasts and projections with appropriate assumptions to justify the continued use of the going concern assumption. Audit Committees in conjunction with the management team should prepare their own assessment of why going concern remains appropriate and discuss this with the auditor at the planning and closing meetings.
6. Remote Working
Remote working has become the new norm. However, with this comes new challenges around employee health and safety. Employers are responsible for ensuring that remote workers have appropriate working arrangements and equipment at home as they do in the office. There has been a rise in claims related to this area. There should be appropriate remote working policies and procedures including procedures covering confidentiality, use of the organisations assets and data security.
7. Financial Supports
Many organisations have availed of government supports during the pandemic. If the organisation has claimed these supports, there should be effective oversight in place to ensure that the claim was appropriate, that the funding was used in the way that it was supposed to be and that there are appropriate anti-fraud measures in place.
How Can RBK Assist?
Our dedicated team can provide assistance to audit committees to fulfil their duties:
- Give advice and guidance on the maintenance of the risk register, risk appetite and reporting on how risks are managed
- Review and provide guidance on best practice elements of the business continuity plan
- Offer HR advice, support and guidance on implementing appropriate remote working protocols and policies
- Review IT policies and procedures and comment on the overall robustness of same
- Provide advice and support on the application for financial supports, the accounting treatment of these and the related tax implications
For further details, contact please contact our team on (01) 6440100 / (090) 6480600:
- Ronan Kilbane, Audit & Business Advisory Partner
- Michelle O'Donoghue, Audit & Business Advisory Director
- Evelyn Smyth, Senior Manager Audit & Business Advisory