Learnings from leading European audit committee chairs, March 2023
A large-scale fraud can not only wreak havoc on the company directly affected, but it can also erode trust in capital markets. Recent high-profile frauds have led stakeholders to ask how Europe’s largest companies can do more to prevent, detect, and mitigate fraud. Fraud risk oversight is a persistent concern for audit committees.
From 2020 to 2022, Tapestry Networks, with the support of EY, conducted in-depth conversations with experienced audit chairs as part of a multiphased research project to explore how audit committees can strengthen governance in this area. This paper presents our cumulative findings, emphasizing practical recommendations for audit committees. Every board and company are different, and we expect that readers will adapt practices to their particular situations, in consultation with professional advisers.
Our research identified the core issue facing audit committees today: fraud risk is constantly evolving, and qualitative aspects, such as culture and cognitive biases, create unique oversight challenges.