Prioritizing a heavy audit committee workload is never easy, and 2015 will continue to be challenging given the developments in the global risk, regulatory and political environments.
Drawing on insights from recent survey work and interactions with audit committees and business leaders throughout the year, KPMG’s Audit Committee Institute has flagged 10 things - highlighted below and detailed in the full report - that audit committees should keep in mind as they consider and carry out their 2015 agendas.
- Maintain (or regain) control of the committee’s agenda.
- Quality financial reporting starts with the CFO and finance organization; maintain a sharp focus on leadership and bench strength.
- Monitor fair value estimates, impairments, and judgments of key assumptions underlying critical accounting estimates.
- Understand the implications of FASB’s new revenue recognition standard and other accounting changes on the horizon.
- Understand the company’s domestic and international tax positions, and the (very real) implications for the brand.
- Consider whether the financial statements and other disclosures tell the company’s story - and the audit committee’s.
- Stay apprised of the PCAOB proposals - and global audit reform initiatives - potentially impacting the external auditor’s role and relationship with management and the company.
- Make sure the company’s ethics and compliance programs are keeping up with new vulnerabilities to fraud and misconduct.
- Position internal audit to be an indispensable resource.
- Make the most of the audit committee’s time together: effectiveness requires efficiency.