Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Kiwi companies keep closer eye on their CFO’s

Kiwi companies keep closer eye on their CFO’s

KPMG International survey

New Zealand companies are leading the world when it comes to monitoring the performance of their Chief Financial Officer (CFO), according to KPMG International’s 2014 Global Audit Committee Survey.

The survey, which explores the challenges being faced by audit committees in organisations in 17 countries around the world, also gives specific insights for New Zealand.

Seventy-three percent (73%) of New Zealand companies reported that the performance of their CFO was “rigorously evaluated against clear performance objectives”. This was well above the global average of 59%.

Souella Cumming, the head of KPMG’s Audit Committee Institute (ACI), says it is encouraging to see New Zealand companies are increasingly valuing the CFO role.

“The CFO is becoming as critical to an organisation’s performance as the CEO,” says Souella Cumming.

“In many of the companies we work with at KPMG, we’re seeing a definite re-positioning of the CFO role. They are evolving into much more of a strategic business partner within the organisation.”

When it comes to succession planning for the CFO, however, New Zealand was doing just as poorly as the rest of the world. The survey revealed that 62% of global companies do not have a formal succession plan in place for the CFO – and warned this was a “major risk” for any company.

Bigger workload, wider responsibility

The 2014 Survey also found that the workload of audit committees continues to grow bigger and wider. It was expanding beyond the core responsibility of financial risks into other areas such as IT, cyber-security, and global systemic risks. Forty-three percent (43%) of respondents said it was becoming “increasingly difficult” to oversee these wider responsibilities.

Graeme Edwards, Head of Audit at KPMG New Zealand, says management and Boards should be careful not to overload their audit committee members.

“Audit committee agendas are not getting any lighter,” says Graeme Edwards.

“These survey findings should serve as a catalyst for boards and management teams to assess the adequacy of their governance processes in critical areas. It’s a good time to step back and assess whether the audit committee’s risk oversight responsibilities are appropriate.”

Strategies to better manage the workload might include reallocating responsibilities among the full Board and board committees; or creating new committees to focus on specific areas of risk.

Government regulation biggest challenge

The 2014 Survey also asked respondents which risks, aside from financial reporting risk, pose the greatest challenges to their company. Government regulation/impact of public policy initiatives was ranked as the biggest challenge, at 48% globally (and 53% among New Zealand companies).

Souella Cumming says this is not surprising, given the increasing pressures of public policy around issues such as health and safety.

“Health and safety is currently top of mind, particularly in the wake of the Pike River disaster. The Government has signalled changes to legislation that will place more onerous responsibilities on directors, with significant consequences for non-compliance.”

Growing role for internal audit

In other Survey findings, more than 80% of Audit Committee members wanted to see their company’s internal audit team take on broader responsibilities. They wanted to extend internal audit’s role beyond the traditional financial reporting and controls, to encompass other key risks facing the business.

Souella Cumming says Australasian companies are well-placed to take this ‘enterprise-wide’ approach to risk management, as they are already ahead of the game.

“While it’s still a fairly recent development in the USA, New Zealand and Australia started to adopt enterprise risk management back in the early 90s. We were the first countries in the world to develop a risk management standard…it only became an international ISO standard 4-5 years ago. We did lead the world in that context.”

Another trend in recent years is for companies to outsource (or co-source) their internal audit function. KPMG New Zealand currently partners with a number of organisations, both public and private, to provide these services.

Ends


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Future Brighter Money: RBNZ Releases New Bank Note Designs

New Zealand’s banknotes are getting brighter and better, with the Reserve Bank today unveiling more vibrant and secure banknote designs which will progressively enter circulation later next year. More>>

ALSO:

Commerce: Supermarket Inquiry Finds No Breaches By Countdown

The Commerce Commission inquiry into anti-competitive behaviour by Countdown supermarkets, alleged by former Labour Party MP Shane Jones, has found nothing to warrant prosecution, although it warns supermarkets to take care in the way they communicate... More>>

ALSO:

Crown Accounts: English Flags ‘Challenge’ To Budget Surplus

Finance Minister Bill English is warning next month’s half yearly fiscal and economic update from the Treasury may not forecast a budget surplus, saying that returning the government’s accounts to surplus in 2015 will be “a challenge”, given the decline in commodity prices and weak global inflation. More>>

ALSO:

March 2015: Netflix To Launch In Australia And New Zealand

World’s Leading Internet Television Network to Offer Original Series, Movies, Documentaries, Stand-Up Comedy Specials and TV Shows for Low Monthly Price More>>

ALSO:

Price Of Cheese (Is Up): Dairy Product Prices Fall To Five-Year Low

Dairy product prices fell in the latest GlobalDairyTrade auction to the lowest level in more than five years, led by declines in rennet casein and skim milk powder. More>>

ALSO:

Gordon Campbell: On The Australians Scoring Trade Points Against Us With The Chinese

It hasn’t been a great year for Trade Minister Tim Groser... To top it off, Australia has just signed a FTA with China that has far better provisions on dairy exports than what New Zealand currently enjoys in our own FTA with China. More>>

ALSO:

Iwi & Local Consultation: Oil And Gas Block Offer 2015 Begins

Energy and Resources Minister Simon Bridges today announced the start of the Block Offer 2015 process for awarding oil and gas exploration permits. More>>

Industrial Action: Stats NZ Throwing Public Money Away Duplicating Data

The Public Service Association (PSA) says Statistics NZ are throwing money away by collecting the same data twice for official statistics such as the Consumer Price Index... As part of the ongoing industrial action, field interviewers who are PSA members are continuing to collect data, but are not sending it through to Statistics NZ. More>>

ALSO:

Other Stats:

Space: Rosetta's 'Philae' Makes Historic First Landing On A Comet

After more than a decade traveling through space, a robotic lander built by the European Space Agency has made the first-ever soft landing of a spacecraft on a comet. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news