Tapestry Networks - North Central Audit Committee Network

North Central Audit Committee Network

The North Central Audit Committee Network is a regional extension of the Audit Committee Leadership Network in North America . The North Central ACN is a group of audit committee chairs from leading companies based in the Lake Erie and Ohio Valley region.

Convened by Ernst & Young and produced by Tapestry Networks, the North Central ACN meets three times a year. Its private dialogues help develop practical insights and solutions to enhance the functioning of financial markets and strengthen relationships among the firm, leading companies and their directors.

Thought leadership created in North Central ACN dialogues is captured and published by Tapestry to a wider audience in VantagePoint. Recent issues of VantagePoint from the North Central ACN include:

Navigating a changing regulatory landscape (PDF) - March 30, 2010
On March 2, 2010, the North Central Audit Committee Network convened in Jupiter, Florida to discuss how audit committees and boards are navigating a range of regulatory changes, including accounting and reporting changes. Members came away from the discussion with a new sense of urgency about understanding the potential impact of the wave of unprecedented accounting changes underway, even if conversion to International Financial Reporting Standards is still years away. Members also discussed how their companies are dealing with governance changes, including new disclosure requirements, and how their boards can retain a focus on strategy, devote attention to oversight on risks to the business, and keep looking ahead: in other words, ensuring that boards can continue to serve the best interests of the same shareholders that the array of potentially distracting governance changes are meant to empower.

Setting the agenda for 2010 (PDF) - October 21, 2009
The North Central Audit Committee Network met on September 29, 2009 to discuss considerations for setting their audit committee agendas for 2010. Amid heightened regulatory scrutiny, members expect their audit committees to more deeply review the full range of financial disclosures and communications to ensure consistency in message and tone. Members say their audit committees are increasingly narrowing the focus of risk management oversight, by coordinating with management, the full board and their advisers, and expect to continue to spend time reviewing liquidity and finance issues. Ultimately, members concluded that developing a practical agenda for 2010 will require efficiency and flexibility to allow audit committees to react to emerging issues throughout the year.

Lessons from the economic and financial crisis (PDF) - July 2, 2009
NC ACN met on June 11, 2009, to consider lessons audit committees and boards can take from the economic and financial crisis. Members discussed how boards have adapted their agendas and actions to create a "new logic" for today's circumstances.

Adapting audit committee oversight to a rapidly changing environment (PDF) - April 3, 2009
NC ACN members discussed the ways their audit committees are adapting oversight to weather the economic and financial “100-year storm.” Audit committees face a number of short-term challenges, including reviewing liquidity and cash management, and managing a number of financial reporting issues, but they are also asking tough questions of management to ensure their companies are well positioned for the future. Part of this preparation requires a review of risk management processes, which need top-down support and may need to be refocused and enhanced in the wake of the financial crisis and recession.

Keeping pace in times of rapid change (PDF) - October 10, 2008
VantagePoint explores the ways audit committees are managing their role in an environment of rapidly changing
regulation, economic downturn, and market upheavals. Network members considered the potential impact of new accounting pronouncements, including the switch to International Financial Reporting Standards, areas of concern relating to the financial crisis, and how to avoid letting the audit committee’s financial expertise make it the default committee for overseeing an excessively broad range of business risks.

The role of the board and the audit committee in major transactions (PDF) - April 15, 2008
NC ACN members identified ways boards might improve oversight of transactions, especially acquisitions, to ensure they create shareholder value and what specific role the audit committee has in this oversight. The network’s discussion focused on the following themes: Boards may need to be more proactive to ensure transactions create value; Discussion of major transactions is part of strategic planning; Audit committees focus on core oversight responsibilities; Few boards have standardized processes for transaction oversight; and, Cultural fit is essential for successful acquisitions, yet often overlooked.

Internal audit in transition: redefining the function (PDF) - October 30, 2007
Five years after the passage of Sarbanes-Oxley and following the implementation of Auditing Standard No. 5, members discussed opportunities to rethink the future role and direction of the internal audit function. Issues discussed include the role of internal audit in risk management, identifying ways to limit compliance work, and marshalling the appropriate resources for a newly defined scope for the function.

Navigating challenging situations (PDF) - July 6, 2007
Explores how audit committees address unplanned issues that occur during the year, including fraud, litigation, and other challenging situations.

The audit committee's relationship with the finance organization (PDF) - March 15, 2007
Discusses the relationship between the audit committee and the finance organization, including the changing role of the CFO and the challenges and opportunities inherent in assessing the finance organization.

Information technology governance (PDF)
- November 8, 2006
Explores information technology (IT) governance – particularly IT risks and opportunities – and the problems audit committees face in overseeing IT without an IT expert on the board. The network also discussed the sources of expertise upon which audit committees draw to understand IT issues.

Risk management: in search of a practical approach (PDF) - June 26, 2006
Reflects the fact that members feel risk management matters, and that it is a process - not a project. Members agree that the audit committee is a catalyst for board oversight of risk, while acknowledging that senior executives drive risk management. Members also believe internal audit plays an important role in monitoring risk.

Maximizing the value of the audit and the external auditor (PDF) - March 17, 2006
Explores how audit committees extract considerable additional value from their external auditor over and above the value of the basic audit.

The future of internal audit (PDF) - Jan. 6, 2006
Summarizes the more formal and active role the audit committee is taking in reviewing the internal auditor's performance and compensation, along with the board's increased expectations of the role.

Audit committee leadership: Balancing art and science (PDF) - Oct. 28, 2005
Summarizes the theme of the discussion: "Shared responsibility: the audit committee and the board."

Section 404: market and regular reaction (PDF) - Aug. 1, 2005
Contains new feedback from one of the audit committee networks on the PCAOB and SEC statements of May 16.

Section 404: reflections on year one (PDF) - April 8, 2005
Reflects the combined views of the Mid-Atlantic and North Central Audit Committee Networks, focusing on final costs and potential benefits resulting from the first year of Section 404 implementation, and on ways to comply with Section 404 at lower cost and with less disruption in year two.

Enterprise Risk Management and the audit committee (PDF) - Mar. 2, 2005
Highlights diverging views on the scope of the audit committee's risk oversight responsibilities, with ACN members emphasizing the continued importance of intuition (vs. formal risk management process) and the board's responsibility for non-financial risk management and compliance issues.

The changing face of the audit committee / Section 404 update (PDF) - Nov. 12, 2004
Delves into the audit committee's evolving (and growing) role - how these changes should impact committee composition, compensation, and workload, and the greater emphasis ACN members place on qualitative evaluation and on operational as well as financial expertise.

Section 404: lessons learned and value earned? (PDF) - July 14, 2004
Discusses the surprisingly high costs and questionable business benefits of Section 404 activities, from the perspective of ACN members who are uncertain of the internal audit's future role and see deeper, but more tense, relationships with external auditors.

North Central ACN members are audit committee chairs of public companies based in the region. Current member companies include:

American Greetings

Ashland Inc

Brush Engineered Materials Inc.

CMS Energy Corporation

Convergys Corporation

Cooper Tire & Rubber Company

Corning Incorporated

EnPro Industries, Inc.

Family Dollar Stores, Inc.

Federal-Mogul Corporation

The Goodyear Tire & Rubber Company