The Future for Audit Committees: Changes to Accounting Rules, Critical Audit Matters, Reporting, and Disclosures

As corporations face more complex and interconnected risks in today’s global economy, the responsibilities and workload of the audit committee have continued to expand and become ever more complicated. On top of that general trend, there are significant expected changes to the income statement, tax transparency, audit reporting, and disclosure rules that audit committee members need to have on their radar screens. The Public Company Accounting Oversight Board (PCAOB) has been critical of audit quality and reporting and appears likely to enhance the importance of critical audit matters (CAMs). Meanwhile, the Financial Accounting Standards Board (FASB) has issued proposals to disaggregate the income statement and to mandate tax transparency. And the Securities and Exchange Commission (SEC) has issued proposals requiring enhanced disclosures for climate and cybersecurity risk and oversight. Moreover, the SEC is soon expected to propose additional human capital disclosures, heeding calls to provide more information to investors about what has become the most valuable asset at many companies with the rise of the “human capital firm.” This session will discuss best practices for how audit committee members can keep up with these expanded responsibilities and calls for increased transparency and prepare for changes to accounting, reporting, and disclosure obligations that will fall under the audit committee’s oversight.