“The comparatively high risk profile of mining and metals companies gives rise to greater expectations of their audit and risk committees. Their focus should not be highlighted by increased regulation and compliance. Their objective should be to governing not grinding.” Tom Whelan, Global Mining and Metals Assurance Leader
The role of the audit committee has expanded in the last few years and the emphasis is now on accountability and risk.
For our 2010 survey, we talked to audit committee members from top multinational mining and metals companies. And to make sure we got a complete picture, at some companies we interviewed the entire committee to compare and contrast their views.
One view that came through loud and clear is this:
The audit committee's work is more and more challenging as they struggle to draw the line on where their role begins and ends.
We found that the majority of audit committee members are concerned that they will be overloaded with compliance issues in the future, bringing a greater need to move back into financial control type risk. In this event, the composition of the audit committee will need to include both financial expertise and the more commercial industry-specific expertise.
As the focus on risk increases it may blur the responsibilities between the audit committee and management. If the audit committee has this broadening set of responsibilities, they also need to provide good governance. Supporting detail around financial reporting could distract them from their core mission of good financial governance.
In order to reset this balance, audit committees require a clear understanding of their risk landscape and they need to obtain the requisite assurance that management is appropriately managing these risks.
