Trough a cyber security lens

Transcription

1 Trough a cyber security lens 2015 Global Audit Survey kpmg.ch/cyber

2 What the 2015 survey tells us Short of a crisis, the issues on the audit committee s radar don t change dramatically from year to year (and they probably shouldn t); but sometimes small shifts tell a big story. In KPMG International s 2015 Global Audit Survey, it comes as little surprise to see four key concerns carried over from last year: economic and political uncertainty and volatility regulation and the impact of public policy initiatives operational risk and cyber security. Clearly, a slowing global economy, the flare-up of geopolitical hotspots, and the proliferation of major cyber breaches have intensified the spotlight on these issues. In the year ahead, audit committees say cyber security and oversight of risk will require even more attention. For many audit committees today, these headline risks are also driving a slower moving yet critically important trend, potentially impacting the audit committee s effectiveness: agenda overload. Audit committees, by and large, continue to express confidence in their oversight of the company s financial reporting and audit quality. However, the accelerating speed and complexity of business and risk are stretching and straining many audit committee agendas. In a positive development, more boards are reallocating risk such as cyber security oversight responsibilities among their committees and the full board, which translates into more time for quality discussions and a deeper understanding of the business. Of course, it is difficult to compare data from 27 countries often with markedly different business environments, regulatory requirements, and corporate governance practices. However, our 2015 survey findings offer insights that audit committees (as well as management teams, auditors, and other stakeholders) can use to sharpen the committee s focus, benchmark its responsibilities and practices, and strengthen its oversight going forward. Source: 1

3 Global snapshot Uncertainty and volatility, regulation and compliance, and operational risk top the list of challenges facing companies today. Many audit committees around the world point to economic and political uncertainty and volatility, regulation and compliance, operational risk, and controls posing the greatest challenge for their companies. Which is little surprise, given the struggling global economy, ongoing geopolitical turmoil, heightened government regulation, and speed of ever-changing cyber security risk and technology innovation. Audit committees want to spend more time on risk oversight particularly cyber security and the pace of technology change. In the months ahead, audit committees want to devote more or significantly more agenda time to overseeing the company s risk management processes and operational risk and controls, as well as cyber security and the pace of technology change with particularly acute concerns reported in the United States. The quality of information about cyber security and technology risk, talent, innovation, and business model description is falling short. Audit committee members rate much of the information they receive as good or generally good, yet many continue to express concern about the information they receive (at the committee or full board level) related to cyber risk and technology change, highlighting the CIO ranking lowest overall, in terms of quality interaction and communication. In this report, we zoom in on the results specific to cyber security showing where countries rank compared to the global average. 2

4 Top challenges and concerns Which risks pose the greatest challenge for your company? This graph shows respondents citing cyber security as one of the top three risks facing their company. 30% % 20% 15% % 5% Belgium US Chile Spain Singapore Australia Canada Brazil Global France Ireland Portugal Switzerland 3

5 UK South Africa New Zealand China/Hong Kong Japan Poland Mexico Peru Indonesia Channel Islands Netherlands Taiwan Thailand India Philippines 4

6 Top challenges and concerns How much agenda time should your audit committee devote to cyber security, including data privacy and protection of intellectual property in 2015, compared to 2014? Significantly 3 Less 37 5 Not More time more time time No change applicable Note: These stand-out figures refer to the global average. Detailed results by country: More time Significantly more time Less time No change N/A Number of respondends (N) Switzerland US UK Canada South Africa Australia Belgium Spain Japan New Zealand Global Singapore Chile Netherlands Brazil Channel Islands Ireland India Portugal Thailand France Mexico Peru China/HK Indonesia Philippines Poland Taiwan

7 Please rate the quality of information you receive whether as a member of the audit committee, other commitments, or full board about cyber security and data privacy risks and their potential impact on the company. Detailed results by country for the answer: 10 Needs improvement : Excellent Spain (N: 22) 59% South Africa (N: 67) 49 54% Generally good but France (N: 34) 53% issues arise periodically Poland (N: 19) 53% UK (N: 92) 53% 41 Note: These stand-out figures refer to the global average. Needs improvement Switzerland (N: 21) 52% Australia (N: 74) 51% Belgium (N: 39) 51% Peru (N: 24) 50% Singapore (N: 28) 50% Netherlands (N: 19) 47% Channel Islands (N: 20) 45% New Zealand (N: 141) 45% India (N: 30) 43% Canada (N: 79) 41% Ireland (N: 49) 41% Global (N: 1535) 41% Brazil (N: 102) 38% Mexico (N: 74) 38% Indonesia (N: 30) 37% US (N: 228) 36% Chile (N: 21) 33% Philippines (N: 20) 30% China/Hong Kong (N: 26) 27% Japan (N: 120) 23% Portugal (N: 20) 20% Thailand (N: 22) 18% Taiwan (N: 19) 16% N: number of respondents 6 Cyber Insights Magazine: Edition 2

8 Top challenges and concerns Please rate the quality of the audit committee s communications and interactions with the Chief Information Officer: 23 Excellent 29 Good, but issues arise periodically 20 Needs improvement 27 Not applicable or no significant interaction Note: These stand-out figures refer to the global average. Detailed results by country: Excellent Good, but issues arise periodically Needs improvement N/A or no significant interaction Number of respondends (N) France Taiwan Chile Japan Thailand US Australia Peru Belgium Brazil Channel Islands Switzerland Global Mexico Canada Ireland UK India New Zealand Philippines Portugal South Africa Indonesia China/HK Singapore Poland Spain Netherlands

9 To which group has the board assigned the majority of tasks directly related to the oversight of cyber security and data privacy risk? Audit 12 Audit 14 Risk 12 Technology 11 Other Full board & Risk or Finance Note: These stand-out figures refer to the global average. Detailed results by country: Full Board Audit Audit & Risk or Finance Risk Technology Other Number of respondends (N) Channel Islands Taiwan Poland Switzerland China/HK Netherlands Portugal US New Zealand UK Belgium Canada Singapore Australia Global India Philippines Ireland Brazil France Japan Peru Thailand Mexico Spain Indonesia South Africa Chile

10 Top challenges and concerns Regional Data Points U.S. and Canada Regional Data Points Europe In the US and Canada, audit committees pointed to operational risk, the company s risk processes, and cyber security as key areas of oversight that will require more agenda time in the year ahead. In Europe, cyber security along with operational risk, the company s risk processes, and the pace of technology change are likely to get greater attention in the year ahead. 9

11 Survey demographics Please select the type of entity for which your responses have been based: Are you the audit committee chair? Public Company 62% Not-for-profit 14% Government entity 9% Private company private equity 8% Private company venture capital 6% Private company family owned 2% Yes 54% No 46% What is the annual revenue of the largest company for which you served as an audit committee member? Less than US $250m 32% US $250m - $500m 15% $500m - $1bn 11% $1bn - $1.5bn 8% $1.5bn - $5bn 15% $5bn - $10bn 6% $10bn or more 9% Not applicable 4% What is the company s primary industry? Banking/Financial Services Industrial Manufacturing/Chemicals Retail/Consumer Goods Energy/Natural Resources Insurance Technology/Software Healthcare Transportation Real Estate Building/Construction Communications/Media Pharmaceuticals Higher Education Other 18% 14% 10% 8% 6% 5% 5% 4% 4% 3% 3% 2% 2% 17% 10

12 YOUR CONTACTS IN SWITZERLAND KPMG AG Badenerstrasse 172 P.O. Box Zurich Matthias Bossardt Partner, Head of Cyber Security T: E: The information contained herein herein is of is a general of a general nature nature and is not and intended is not intended to address to the address circumstances the circumstances of any particular of any individual particular or entity. individual Although or entity. we endeavor Although to provide we endeavor accurate to provide and accurate timely information, and timely there information, can be no there guarantee can be that no such guarantee information that is such accurate information as of the date is accurate it is received as of or the that date it will it continue is received, to be or accurate that it will in the continue future. No to one be should accurate act in on the such future. information No one without should appropriate act on such professional information advice without after a appropriate thorough examination professional the advice particular after situation. a thorough examination of the particular situation. The scope of any potential collaboration with audit clients is defined by regulatory requirements governing auditor independence KPMG International Cooperative ( KPMG International ), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does 2018 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Cooperative ( KPMG International ), a Swiss legal entity. All rights reserved. The KPMG name, logo and cutting through complexity are registered trademarks or trademarks of KPMG International. OLIVER for KPMG OM035290A April 2015