Over half of non-executive directors in Scotland are concerned about the effectiveness of whistle-blowing procedures at corporates, and as a result, are recommending that audit committees are given a greater role in overseeing internal controls.
Almost 60% report that procedures for corporate employees to raise the alarm over corporate fraud are inadequate, while 69% advocate increased responsibility for audit committees.
The survey, carried out by KPMG, also revealed that almost half the respondents thought their committees were inadequately resourced, and that the recruitment of experienced audit committee members was proving difficult.
Iain McLaren, senior partner for KPMG Scotland, comments: "With the increased expectations of corporate governance over the past 18 months, it's worrying to see that non-execs are concerned about the effectiveness of whistle-blowing practices in Scottish businesses."
The report highlights the fact that corporate governance issues are prevalent across the globe. "Boards need to make sure they are tightening up their risk management practices," adds McLaren.