Audit Committees Urged to Ensure Effective Oversight Function

Professional financial services and advisory firm, KPMG has advised members of the audit committee of organisations to be more effective in carrying out their oversight functions on their organisations’ financial reports.

Speaking at the KPMG Audit Committee Seminar for Shareholders in Lagos, the Partner, Audit Services, KPMG, Nneka Eluma, said audit committee members should ensure that financial statements show

accurately, companies’ affairs and financial position.

Eluma while discussing the topic: “Analysis and Interpre- tation of Financial Statements Including Regulatory Updates,” stated that for

the committee members to be able to discharge such critical functions effectively, they need to have deep understanding of the business of the company.

“If they will understand the business, they will then understand the contents of the financial report and then ask exciting questions on them,” Eluma said. She explained that a company’s financial statements has five main components

which include statements of financial position, notes to financial statements, statements of cash flow, statements of profit or loss and comprehensive income and statement of changes in equity.

Also contributing, another Partner at the KPMG Audit Services, Mr. Ayo Soyinka said that audit committee members should ascertain whether the accounting and reporting policies of the company are in accordance with legal requirements and agreed ethical practices.

“Review relevant regulatory returns filed and disclosures made by the company; review companies’ semi-annual and annual financial statements,” Soyinka said.