Audit Committees in the Greek Banking Institutions: A Qualitative Investigation of Effectiveness

Andreas Koutoupis, Senior Manager, Internal Audit Services, PricewaterhouseCoopers Business Solutions S.A, Greece

In order to obtain access to well-developed financial markets, Greek banks need to win and maintain investors' confidence, not only in a symbolic and rules-based approach (complying as closely as possible with international best practices and regulations), but pursue a principles-based approach in order to achieve the desired goal of effective audit committee. The question that this paper seeks to answer is: "What are the key drivers for an effective audit committee in countries where audit committees are relatively new?" The overall aim of this research is to identify the main drivers which may contribute to the effectiveness of audit committees and provide a framework for their successful operation in the Greek banking institutions. To address this question, the research included primary and secondary data. The secondary data was based on the critical review of the literature regarding the purpose, role and indicators of effective audit committees, noting its limitations, mostly in the Anglo-Saxon corporate environment. The primary data was based on a series of interviews with audit committee "participants"- Audit Committee members, internal and external auditors- of five (5) major Greek banks. The conclusions from the primary and secondary data suggested that Audit Committees in the Greek banks follow a legalistic approach associated with the Greek cultural framework.

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Greece Corporate Governance Consultant July 2008 Vol. 1, No. 4, Summer 2008

Andreas Koutoupis

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Andreas Koutoupis BSc (Honors), MSc (Internal Audit), PhD (Cand.), MIIA, PIIA, CIA, CCSA is a Senior Manager within the Internal Audit Services department of PricewaterhouseCoopers, Athens, Greece responsible for the Financial Services (mainly banking) Internal Audit Assurance & Consulting Services. Andreas is a member of the International Institute of Internal Auditors, The Institute of Internal Auditors' UK and Ireland, The Hellenic Institute of Internal Auditors (serving as a member of the Board of Directors being responsible for Training and Education) and the Economic Chamber of Greece (serving as a member of the General Assembly of Representatives). Andreas is an Internal Quality Assessment validator of the International Institute of Internal Auditors. At present, he is completing a Phd Research on Corporate Governance and Internal Auditing. He is also lecturing Internal Auditing in an undergraduate and postgraduate level in the department of Public Administration, Panteion University of Athens (Auditing and Taxation Division) since March 2003. In 2005, he received the Michael J. Barett award by the International Institute of Internal Auditors, while in April 2006 he received a PhD Colloquium award (Cass Business School) for distinctive performance by the IIA-Italy. He joined PricewaterhouseCoopers on November 2000. Andreas is fully dedicated in the Internal Audit Services department. He has been involved either as a project manager, or as a senior in charge in a number of different projects from full outsourcing projects, risk assessments, corporate governance, Sarbanes-Oxley Act compliance, preparation of internal control procedures manuals to organisation and evaluation of internal audit departments. He has participated as a team member on the PwC Eurofirm’s Internal Audit Operational Efficiency Workgroup (2007) – Internal Audit Methodology – Integrating Lean – Six Sigma and PITBM Tools and Methodologies to enhance our Audits Value.

PricewaterhouseCoopers Business Solutions

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PricewaterhouseCoopers was established by the merger of PriceWaterhouseCopers and Coopers & Lybrand companies. The new company is today the biggest independent organization in provision of business services worldwide. The aim of this merger was the creation of an international company providing assurance and business services that would offer integrated solutions to the complex problems and needs of its customers. PricewaterhouseCoopers offers a spectrum of services based on 140.000 highly qualified employees in 149 countries. PricewaterhouseCoopers allocates worldwide: 802 offices in 149 countries 140.000 highly qualified professional employees Specialized teams Executives with remarkable professional qualifications 22 business sectors and multiple types of services State-of-the-art information systems International networking for better customers' service. The global network's success of PricewaterhouseCoopers is proved by the range and the importance of its clientele. For example, in 2005, PricewaterhouseCoopers provided its services to 84% of Fortune Global 500 and to 76% of FT Europe 500

Greece Corporate Governance Consultant July 2008 Vol. 1, No. 4, Summer 2008