“Sustainability is the issue of the day and will impact reporting for sure in terms of IFRS and the promotion of a sustainable economy,” John Berrigan, deputy director general of DG Fisma, said. The European Corporate Reporting Lab was created this year to help to identify best practices for non-financial reporting, he said.
Berrigan added that the review would look at making corporate reporting more efficient and that technology would be a key driver for creating better access to a wide range of stakeholders.
These themes were picked up in a panel discussion at the event.Oliver Boutellis-Taft, CEO Accountancy Europe, Marina Brogi, Professor in the department of management at Sapienza University of Rome, Karim Hajjar, CFO at the materials company Solvay and V. Willems of SG SME Unitedsaid that while reform was needed, any changes should not endanger what had already been achieved.
They also noted that the difference between financial and non-financial reporting information was not as clear cut as it used to be, which made the case for integrated thinking and reporting stronger. A further panel discussion explored the opportunities that digitalisation could bring to corporate reporting.
“Management needs to put a system in pace to create such non-financial data,” the panel concluded. “These processes can be checked by the auditors and the audit regulators need to ensure it can be measured.”
Internal auditors have a clear role to play in providing assurance that the data collated by such systems is comprehensive and accurate.
“An organisation’s ability to report effectively on the social, economic and environmental impacts is dependent on its management system’s reliability,” Farid Aractingi ECIIA President said. “Internal audit is in a unique position to provide assurance those systems are delivering information that both the organisation and its various stakeholders can have confidence in.”
Internal auditors need to remain vigilant following recent data showing that macro risks, such as economic growth and the state of monetary policy, weigh heavily on the minds of chief executives in the insurance sector.
“Despite some positive developments, the continuing low-yield environment and the observation that market fundamentals might not properly reflect the underlying credit risk, are still important concerns for the European insurance industry,“ says European Insurance and Occupational Pensions Authority’s (EIOPA) quarterly risk dashboard.
This risk dashboard is based on EIOPA’s analysis of Solvency II data and represents the main risks and vulnerabilities in the European Union insurance sector.
“Internal auditors will welcome the headline news that the risk environment remains constant,” Hervé Gloaguen, chairman of ECIIA’s Insurance Committee. “But the continuing low interest rate environment, political instability in some countries, and the impact of adverse weather events mean that auditors need to be on their guard.”
It is important that internal auditors are positioned within each company to provide objective assurance over key risks. That is best achieved through the three lines of defence model of corporate governance, he added.
The ECIIA elected Farid Aractingi as President of its management board at the body’s annual conference in Switzerland.
Aractingi (centre in image) was previously Vice President of ECIIA. He is Chief Audit, Risk and Organisation Officer of Renault and a former Chairman of the Board of the IFACI, the French Institute of Internal Auditors, where he is now an honorary member.
“I’m looking forward to building on the great progress ECIIA has made in being the voice of the internal audit profession across Europe,” Aractingi said. “Henrik has done a fantastic job of raising the profession’s profile and authority among our many stakeholders over the past three years. I intend to build upon that firm foundation.”
Henrik Stein stepped down as President.
Thierry Thouvenot (left in image) was elected Vice President. Thouvenot has been IIA Luxembourg Chairman since 2012. Gabrielle Rudolf von Rohr (right in image) was appointed ECIIA Treasurer.
Jens motel now represents IIA Germany on the board and Manuel de Alzua, IIA Spain. The former Yugoslav Republic of Macedonia became an ECIIA member for the first time.
Internal auditors and representatives from supreme audit institutions shared best practices at a recent seminar in Brussels, organised jointly by ECIIA and EUROSAI.
For example, the Austrian Court of Audit said that it was creating knowledge communities with its internal audit partners to develop better processes for transferring operational knowledge to help increase the effectiveness of audits.
SAI Netherlands explained that building a robust working relationship with internal audit had led to it having unrestricted access to the electronic working files of the internal audit function. It also said it now discussed the performed auditors’ work in regular meetings with top management from the internal audit team.
“These collaborations are great examples of best practice,” ECIIA President Henrik Stein says. “ECIIA and EUROSAI will be jointly promoting such initiatives over the coming years.”
The professional bodies are planning to extend their partnership in a range of areas. Possible themes for future cooperation identified at the meeting included reducing costs in the public sector, reducing certain risks relating to cybersecurity, for example, and improving good governance in the public sector.