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On the 2017 audit committee agenda
Financial reporting, compliance, and the risk and Reinforce the audit committee’s direct
responsibility for the external auditor.
internal control environment will continue to be put
—specifically overseeing the auditor
to the test in 2017 by slow growth and economic selection process including any (mandatory)
tender process and auditor independence. Audit
uncertainty, technology advances and business
tenders are quickly gaining momentum in many
model disruption, cyber risk, greater regulatory countries around the world—legally required or
otherwise. The audit committee should ensure
scrutiny, and investor demands for transparency,
the tender process is carried out in an efficient
as well as dramatic political swings and policy and effective manner. Read ACI’s Audit Tendering
Guide to ensure the tender process delivers lasting
changes in the U.S., UK, and elsewhere. Focused,
benefits to your company. To ensure the auditor’s
yet flexible agendas—exercising judgment about independence from management and to obtain its
critical judgement and insights that add value to the
what does and does not belong on the committee’s
company, the audit committee’s direct oversight
agenda and when to take deep dives—will be responsibility for the auditor must be more than
just words in the audit committee’s terms of
critical. Drawing on insights from our recent survey
reference or items on its agenda. All parties—
work and interactions with audit committees and the audit committee, external auditor and senior
management—must acknowledge and continually
business leaders over the past 12 months, we
reinforce this direct reporting relationship
have highlighted eight items that audit committees between the audit committee and the external
auditor in their everyday interactions, activities,
should keep in mind as they consider and carry out
communications and expectations.
their 2017 agendas.
Give non-GAAP financial measures
a prominent place on the audit
committee agenda.
Following ESMA’s final report on
alternative performance measures published in
2015, regulators (and investors) in the U.S., UK
and elsewhere have expressed concerns about
misleading non-GAAP financial measures and
published additional guidance to help companies
evaluate the usefulness and acceptability of non-
GAAP financial information. SEC Chair Mary Jo
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