Corporates split on audit committee reporting
As the November deadline approaches for compliance with the UK Combined Code on Corporate Governance, there is a clear division between companies who are going out of their way to reassure investors and those that are making little effort at all.
According to a report from Independent Audit Limited, many audit committees have made a substantial effort to report more informatively and explain how they are complying with the Code, despite this only being a transitional year.
The survey of the annual reports of 85 of the FTSE 100 companies found that 48% of audit committees reported that they had completed an annual evaluation of their own effectiveness, 30% reported completing a review of the external audit process and 26% reported completing a review of internal auditing ? all encouraging figures for the Financial Reporting Council.
However, many of the same companies that failed to complete any of these evaluations were also part of the 40% that fail to state that their audit committee has at least one member with ?recent and relevant financial experience?, or the 40% that fail to make their audit committees terms of reference available on their company?s website ? both much more basic requirements.