Current Audit Committee Issues Notes

Question 1

______is a top concern for audit committees.

Answer 1

Risk Management

Question 2

Internal audit can

Answer 2

maximize its value to organization by focusing on key areas of risk and the adequacy of the company’s risk management processes generally

Question 3

What 3 things are major challenges and may need more attention from audit committees?

Answer 3

1. tone at the top
2. culture
3. short-termism

Question 4

short-termism

Answer 4

benchmarks are a bit too short term, such as quarterly reporting, that management can focus on that can be detrimental to long-term company health

Question 5

What continues to be a weak spot in financial organizations?

Answer 5

1. CFO succession planning

2. bench strength (# and quality of employees available to fill vacant positions)

Question 6

5. Two key financial reporting issues may need a more prominent place on audit committee agendas

Answer 6

1. implementation of new accounting standards

2. non-GAAP financial measures

Question 7

Why do many companies are preferring to report their non-GAAP numbers?

Answer 7

They claim its a better indicator of success, but SEC sees it as weaselly.

Question 8

6. Audit committee effectiveness hinges on

Answer 8

understanding the business