AC News Issue 54 / Q3 2016

AC News Issue 54 / Q3 2016

The Audit Committee News is a quarterly publication, exclusively in electronic format since 2013, which informs you about all of the latest trends in its core focus areas of corporate governance, risk management & compliance and corporate reporting. The AC News features articles penned by experts from Switzerland and many other countries around the world.

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Editorial

Dear Board members,

On 17 June 2016, the United Federal Assembly adopted the final law relative to the third series of corporate tax reforms (CTR III). The latter aims to preserve and strengthen Switzerland’s attractiveness as a business location whilst taking into account international requirements. Stefan Kuhn and Olivier Eichenberger provide an overview of the main aspects of this important reform.

KPMG’s recent study ‚Seeking Value through Internal Audit‘ analyzes the expectations of the Board of Directors and management towards the internal audit function. In an increasingly volatile environment, the internal audit function must go beyond its traditional tasks in order to contribute to ensuring the company’s long-term going concern. Luka Zupan summarizes the study’s main conclusions in this regard.

The in-depth examination of the statutory auditor’s work by the audit committee is becoming more and more important. On the one hand, it serves the interests of the shareholders, who need to rely on accurate financial reports. On the other hand, it increasingly allows audit firms to differentiate themselves not primarily in terms of price, but also, and more importantly, in terms of quality. Philipp Hallauer explains how the audit committee can assume its responsibility in this respect.

Over the past few years, Professor Reto Eberle and Daniel Lengauer have studied thoroughly for the Zürcher Kommentar the legal provisions on auditing in Switzerland. In their article, they present important conclusions for the audit committee.

The EU audit reform came into effect on 17 June 2016. It is therefore time to examine once again the main consequences of this reform for Swiss companies. Manuela Stefani and Philipp Hallauer show how the new rules could impact internationally active Swiss groups.

IFRS 9, the new accounting standard on financial instruments, must be applied as from 1 January 2018. At first glance, the changes do not seem very extensive. Laura Galbiati shows however that there are major differences compared to the existing IAS 39 and that companies should address the implementation of IFRS 9 without delay.


We hope that you enjoy reading this issue and wish you a great summer.
 

Best regards,
Philipp Hallauer and Hélène Béguin

Risk Management & Compliance

The final straight – Third series of corporate tax reforms (CTR III)

Since 2007 Switzerland has been under increasing international pressure regarding the privileged taxation of holdings, mixed companies and domiciliary companies. In response, the Swiss Confederation and cantons have revised the Swiss tax legislation. Apart from two pending issues, the final law was adopted on 17 June 2016 by the United Federal Assembly.

Read more: Article by Stefan Kuhn and Olivier Eichenberger (PDF, in German)

Effectively managing the expectations of the audit committee from an internal audit perspective

A recent KPMG study offers insights into what members of executive management and the board of directors including the audit committee are expecting from the internal audit function and to what extent these expectations are met.

Read more: Article by Luka Zupan (PDF)

Corporate Governance

Audit Committee Handbook

The eleventh extract of the Audit Committee Handbook is dedicated once again to the internal audit function. This chapter focuses on the oversight by, and interaction with, the audit committee.

Read more: Audit Committee Handbook Chapter 5 Part II (PDF)

Assessment of the audit quality by the audit committee

The audit committee is responsible for assessing the quality of the work of the statutory auditor. In the past this task often focused on the price. Today it concerns more and more the quality and the scope of the audit as well as the objectivity of the audit opinion.

Read more: Article by Philipp Hallauer (PDF, in German)

The statutory auditor and the audit committee – insights from the “Zürcher Kommentar“

Over the past few years Prof. Dr. Reto Eberle (Audit Partner, KPMG) and Dr. Daniel Lengauer (Partner, Kellerhals Carrard) have studied intensively the legal provisions on auditing in Switzerland in connection with the Zürcher Kommentar. In this article, both authors present important conclusions for the audit committee.

Read more: Article by Reto Eberle and Daniel Lengauer (PDF, in German)

EU Audit Reform and its impact on Swiss entities

The EU Audit Reform became effective on 17 June 2016. It will significantly impact companies’ engagement of statutory auditors and providers of non-audit services within the EU.

Read more: Article by Philipp Hallauer and Manuela Stefani (PDF)

Aligning talent and strategy for a future-ready board

KPMG recently spoke with directors Henrietta Fore (Exxon Mobil, General Mills, and Theravance Biopharma) and Alison Winter (Nordstrom, and chair emerita), both co-chairs WomenCorporateDirectors in the USA, to get their thoughts on building and maintaining the right board in a rapidly changing environment.

Read more: Article by the ACI in the USA (PDF)

The World of Corporate Governance - Ukraine

In each issue, we provide insights into the “World of Corporate Governance” with a specific country example. This issue focuses on Ukraine.

Read more: Article by the ACI in Germany (PDF, in German)

IFRS 9 (Financial Instruments) for corporates

Looking at the significant new standards which will become applicable in 2018 and 2019, it is no surprise that corporates are mostly focusing on IFRS 15 (Revenue Recognition) and IFRS 16 (Leases). At the same time, sufficient focus should be given to addressing the implications of IFRS 9 (Financial Instruments).

Read more: Article by Laura Galbiati (PDF)

KPMG's Audit Committee Institute

KPMG's Audit Committee Institute

Switzerland’s first platform to provide members with resources and facilitate networking between members of different boards of directors.

© 2016 KPMG Holding AG is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved.

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