International market risk. Transactions. Relationships with key executives. Audit policy in a shifting regulatory environment. Approximately 20 audit committee chairs from Delaware, Kentucky, Maryland, Ohio, Pennsylvania, Washington DC, and West Virginia are meeting to discuss these and other critical audit committee oversight issues in our East Central Audit Committee Network (ECACN), founded in 2012. The network is supported by EY.
This dialogue has contributed to improved audit committee performanceand highlighted opportunities for directors across the region to refinecorporate governance practices.
Recent network topics:
Our latest issue of VantagePoints consolidates perspectives from meetings this past winter of over 80 audit committee chairs across North America. Within this issue, we address corporate culture and compliance, with a focus on the challenge directors face in assessing culture from their seats in the boardroom; new analytics tools that are changing companies' perceptions not only of their markets and customers, but also of their own operating and reporting systems; and finally, corporate tax as a matter of reputational concern, including ways to take charge of the narrative so as to tell the company's true tax story.
Our third issue of VantagePoints consolidates perspectives gleaned from meetings this past fall of over 80 audit committee chairs across North America. A common theme emerged from those discussions, anticipating change. Within this issue, we further explore: dialogue among audit committee chairs and members of the Public Accounting Oversight Board (PCAOB); expectations for China and what a changing China will mean for the global economy as well as individual companies' operations; the new converged standard on revenue recognition, which goes into effect at the beginning of 2017; and finally the topic of risk and the close connection between strategic planning and risk.
On the minds of many audit committee chairs, including those of the East Central Audit Committee Network, is how to prepare for implementation of the new revenue recognition standard issued by the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB). ECACN members also reviewed the role of general counsel, specifically in litigation risk and special investigations. In addition, Dr. Adam Posen, president of the Peterson Institute for International Economics, joined members for a discussion of global macroeconomic trends.
A common thread through each director discussion across all the North American regional audit committee networks was the importance of clear expectations and communications to establish and maintain strong and effective working relationships. Within this issue of VantagePoints the benefits of good communications were addressed across a variety of contexts: between the audit committee and internal audit in the face of ever-growing demands of that function, between the public and private sectors in collaborating on cybersecurity, and between companies and analysts in the disclosure of a company’s financial reporting.
Experts on global tax policy and cybersecurity joined East Central Audit Committee Network members for a discussion of policy updates, regulatory trends, and emerging risks. The tax expert suggested that an organization’s tax strategy should be communicated and understood across the organization as well as overseen at the board level. The cybersecurity experts advised that regular review and assessment of cybersecurity should be a critical element of effective cybersecurity hygiene for any organization. Both strategies help prepare audit chairs for effectively managing their role on company matters.