Bangkok Post, Thailand, Philip Adams Column.

Byline: Philip Adams

Dec. 4--The role of the audit committee is to assist the board and management to meet the financial control and reporting expectations of all stakeholders of a company. However, many audit committee members face barriers when working to achieve this goal within their companies.

The key to an effective audit committee is learning to identify the key risk areas, ensuring that management has implemented effective control systems and aligning reporting systems to monitor and minimise surprises down the road.

The following are conditions that directly impact the quality of corporate risk management programmes:

--Tone at the top: The tone set by top management is the most important factor contributing to the integrity of the financial reporting process.

If the tone is lax, fraudulent financial reporting is more likely to occur, notwithstanding an impressive set of written rules and procedures. Audit committees can work with management to ensure they are sending the right messages.

--Risk through people: There is an inherent unpredictability in what people do. Generally, companies have controls in place to protect them from unknown "people threats", such as competitors.