Financial experts are being asked to join internal audit committees to stop any repeat of the Parmalat debacle occurring in the UK, say the interim management specialists Executives Online. A recent corporate governance code published by the Financial Reporting Council (FRC) stipulates that one member of the audit committee must have recent and relevant financial experience.
The FRC's code also says audit committee members must be independent non-executive directors; the chairman of the audited company is ineligible for membership. Finance members with experience on audit committees, according to Executives Online, are in demand by corporates to deal with the fresh legislation.
"UK companies now realise that these kinds of accounting scandals don't just happen in the US and they are taking steps to beef-up their own audit procedures," says Norrie Johnston, managing director of Executives Online. "However it is becoming difficult to find FDs who can take on the demanding non-executive roles audit committees now require."
The answer, according to Johnston, could be interim FDs with the necessary experience to sit on the committees, combined with an objective standpoint.
"Interim finance directors are highly experienced businessman and women, with proven track records, and are used to standing and saying when they think is something wrong for a business," adds Johnston.