The Major Components and Relationship Issues between the Audit Committee and the CFO
Get your hands around the Governance, Risk Management and Compliance (GRC) issues: The conference will highlight the different roles of the board of directors and the CFO. GRC continues to be a growing priority in resolving the complexities of business processes and operations. The relationship between the audit committee and CFO is vital and success is dependent on their shared responsibility.
The significant increase in accounting complexity, monitoring and reporting has created a need for a strong partnership between the audit committee (AC) and the CFO to respond and prioritize the interests of all stakeholders.
High level of trust and a strong partnership
The guidance related to enterprise GRC provided by the board is significant for the CFO in carrying out the scheduled GRC monitoring, to achieve the strategic goals and report to the AC chairman on the GRC developments and the areas of concern.
Members of the audit committee are key players in the company's financial environment, particularly as it relates to performing GRC oversight. On the other hand CFOs are demanding a better understanding of risks in the boardroom.
Guardians of the GRC processes
The audit committee and CFOs must identify, prioritize and decide on the key GRC risks, related to finances, going concern, IFRS consequences and other balance sheet concerns. Effective communication and openness between the two will provide more insight from CFO and provide the board of directors with the comfort, to set the GRC tone.
Creating an entrepreneurial mentality: The Audit committee is often committed to providing complete A&F oversight to the Board of directors. The CFOs must understand that level thinking, and ensure that the audit committee fully understands the business on behalf of the stake holders. The primary objective of a business is to establish a complete understanding of the company's environment and the industry's competitive atmosphere.
The annual Calendar: Lately a heavy responsibility for CFOs deals with regulatory issues, while the board of directors wantsthe CFO to provide research that drives the business toward increased profitability. The conference will provide guidance on creating a platform that will result in a more proactive agenda between the board and CFO and set the agenda for the coming year.
Successful oversight: With The audit committee's regular participation and treatment with the finance group provides the board with a complete understanding and oversight of the business risks. The review specific GRC aspects of the business area valuable addition to continued director education.
The boards of directors often assume that the CFO is the Governance, Risk Management and Compliance (GRC) conscience of the company. However, there seems to be a need for a platform of understanding between the audit committee and the CFO. The communication between the two has to combine the sense of right and wrong during a crisis situation, define the principles of ethics and code of conduct, and position the strategic GRC drivers for building a strong and effective rapport between the CFO and audit committee to create value.