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    Audit Committee Self-Assessment is a mandatory requirement for listed companies by some stock exchanges such as New York Stock Exchange. The biggest risk, however, is litigation risk. It can create evidence against the company that the audit committee has not done optimal job. The assessment should be limited to matters essential to the committee's role and designed to obtain helpful suggestions for improvement not mere criticism.

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    Audit Committee Self-Assessment is a mandatory requirement for listed companies by some stock exchanges such as New York Stock Exchange. The biggest risk, however, is litigation risk. It can create evidence against the company that the audit committee has not done optimal job. The assessment should be limited to matters essential to the committee's role and designed to obtain helpful suggestions for improvement not mere criticism.

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    29 views1 page

    Hany Abou El Fotouh - Press Quote - 678

    Uploaded by

    hanyfotouh
    Audit Committee Self-Assessment is a mandatory requirement for listed companies by some stock exchanges such as New York Stock Exchange. The biggest risk, however, is litigation risk. It can create evidence against the company that the audit committee has not done optimal job. The assessment should be limited to matters essential to the committee's role and designed to obtain helpful suggestions for improvement not mere criticism.

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    Mon, May 07, 2007, 18:50 GMT

    OIB Compliance Head Calls for Audit Committee Self-Assessment


    05 May 2007 Muscat-HanyAbou-El-Fotouh,HeadofComplianceofOmanInternationalBank(OIB)calledforpubliclylistedcompaniestoapplyauditcommitteeself-assessment.Hewasaddressingthe subjectatCorporateGovernanceForumheldrecentlyinDubai. Abou-El-Fotouhexplainedthatauditcommitteeself-assessmentisamandatoryrequirementforlistedcompaniesbysomestockexchangessuchasNewYorkStockExchange.Itisoptional requirementforunlistedorprivatelyownedcompanies.However,corporategovernancewritersrecommenditasbestpractice Inprovidinganinsightintothebenefitsofauditcommitteeself-assessment,Abou-El-Fotouhexplainedthatitimproveseffectivenessofauditcommitteeandassistsinidentifyingand implementingbetterprocedures.Additionally,theassessmentallowscompaniesandshareholderstobenefitfromthecollective,insightandexpertiseofauditcommitteemembers Abou-El-Fotouhpointedoutthattheassessmentprocessiswithoutitsrisks.Totheextentthattheself-assessmentfocusesonindividualperformance,itcangenerateillwillandactually underminethegroup'sabilitytoworktogether.Besides,theassessmentexercisetakestimeparticularlytofollowupimplementationofrecommendedchanges.Thebiggestrisk,however,is litigationrisk.Itcancreateevidenceagainstthecompanythattheauditcommitteehasnotdoneoptimaljob. Hefurtherexplained:theseriskscanbemitigatedbystructuringtheprocessproperly.Theassessmentshouldbelimitedtomattersessentialtothecommittee'sroleanddesignedtoobtain helpfulsuggestionsforimprovementnotmerecriticism.Thequestionsshouldnotbeaboutindividualsorspecificinstancesofinternalcontrolfailure.Instead,theyshouldfocusontheworking methodandsolicitqualitativejudgment.Inordertomitigatelitigationrisk,herecommendsinvolvingaknowledgeablelawyerworkingcloselywithallcommitteememberstohelpthecommittee evaluatetheanswersandrecommendations Abou-El-Fotouhwentontodescribethepossiblestepsoftheself-assessmentprocess.Heexplained`theassessmentapproachhasthreesteps:Thefirststepisfortheauditcommittee chairmantodecidewhowillcoordinatetheprocessandcreatetheassessmentquestionnaire;whowillprovideinputotherthanauditcommitteememberse.g.chairmanoftheboard,CEO, CFO,externalauditors,othersinteractingwiththecommittee;andwhowillcompiletheresults.Thenextstepeachparticipantcompletesthequestionnaireindependentlyandreturnsittothe coordinator.Thentheauditcommitteechairmanleadsopendiscussionfocusingonareasforimprovementandareasshowinggreatvariationsinanswers.Thefinalstepistocompileareportto theboardofdirectorsontheeffectivenessoftheauditcommittee,recommendationsforimprovementandactionplansorchangesinitstermsofreference InconcludingAbou-El-FotouhsaidOmanisconsideredamongtopcountrieswhoappliedcorporategovernanceoccupyingthetoprankattheArabcountrieslevel.Speakingoncorporate governanceatOmanInternationalBank,henoted'OIBappliesthehighestcorporategovernancestandardsinlinewithinternationalbestpracticeandthedirectivesofthelocalregulators -EndsContact: HanyAbou-El-Fotouh OmanInternationalBank TEL:96899310274 PressRelease2007
    ArticleoriginallypublishedbyPressRelease 05-May-07

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