Saturday, May 19, 2007

PwC: Internal Auditors May Be Missing Risks

The major accounting scandals earlier this decade and the Sarbanes-Oxley Act placed a renewed focus on risk management at publicly traded companies. But assessing risk is one task that has fallen by the wayside at some companies. According to a PricewaterhouseCoopers report, 18 percent of companies do not conduct an annual risk assessment.

That could be worrisome for investor advocates who have trusted Sarbox to encourage regular risk assessments from auditors and management — particularly in the wake of recent direction from regulators that Sarbox-mandated reviews should focus on high-risk areas. "If they aren't adequately looking into risks in the areas of finance, compliance, fraud, and technology, how can they be sure their financial statements are fairly presented?" asks Mark Grothe, research analyst at shareholder-advisory firm Glass Lewis. "More broadly, I think these lapses probably indicate poor management teams and ineffectively run companies."

PwC: Internal Auditors May Be Missing Risks

Labels: internal audit, PricewaterhouseCoopers, risk assessment

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