Advisory Council Reports

NACD Audit Committee Chair Advisory Council

By NACD Staff


Audit Committee Advisory Council Brief

Emerging technologies—such as cognitive technology/artificial intelligence (AI), robotic process automation, and predictive analytics—are transforming business models and opening up new ways for companies to connect up and down their value chains. (See the Appendix for a short glossary of disruptive technologies).

According to the 2018-2019 NACD Public Company Governance Survey, directors view AI as the technology that is not only most likely to disrupt their organizations (46.7%), but also most likely to net long-term benefits (48.9%).

Internal support functions are taking advantage of many of these technologies. In fact, there has been significant movement in internal audit recently, as adoption of technologies such as AI, robotics, and data analytics are on the rise. In a recent survey by KPMG, executives reported increased data accuracy and reliability, increased visibility into end-toend processes and controls, and increased ability to identify data outliers and anomalies as the primary benefits of advanced technologies for finance.

On February 27, 2019, NACD, KPMG, and Sidley Austin LLP convened a meeting of the NACD Audit Committee Chair Advisory Council—a group of audit committee chairs from Fortune 500 companies. The discussion focused on board oversight of emerging technologies and the impact adoption of those technologies is having on the finance and internal audit functions of their companies. The following insights emerged from the discussion:

  • Emerging technologies are supporting internal audit’s journey toward becoming a more value-added partner to management and the board.

  • Audit committee members should be aware of roadblocks that can get in the way of the audit function taking full advantage of the benefits of new technologies.

  • Leading audit committees are providing oversight of the implementation of emerging technologies within the internal audit function by asking important questions about strategy, risks, and talent.

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