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Beyond the Basics: Emerging Audit Committee Practices

As the dust settles on the legislative and regulatory requirements imposed on boards in the earlier part of this decade, audit committee members are ready to move beyond the aspects of simple compliance. Experienced directors know that protecting the company from the devastating effects of a corporate scandal should be at the center of their processes. This session will provide a brief overview of appropriate regulatory and other requirements as well as current developments related to director liability that are of particular interest to audit committees. With this understanding as a background, we will discuss proven techniques that audit committees have implemented to assist in several areas, such as assessing earnings quality and the oversight of ethics and compliance programs.

Assessing the Quality of Earnings and Financial Position

Boards must be satisfied that the financial reports for the organization portray a fair and balanced picture of the company’s operating results and financial position. This program provides a proven framework for the high-level assessment of the quality of earnings and financial position and an overview of leading practices employed by directors to analyze financial statements and assess earnings quality.

Sources of Financial Accounting Standards

Over time, various regulatory bodies have issued accounting and financial reporting standards collectively referred to as Generally Accepted Accounting Principles (GAAP). This course provides audit committee members with an overview of the standard-setting process and a further understanding of the regulatory bodies, such as the SEC, FASB, AICPA and PCAOB. The course also provides a high-level summary of the sources of authoritative GAAP.

Sarbanes – Oxley: Beyond Compliance

Most companies have and continue to expend significant time, money and resources to achieve first-year compliance. As an audit committee member you have been faced with the responsibility to provide oversight to the company’s strategy in complying with the requirements of the Sarbanes-Oxley Act, you are faced with the responsibility of sustained compliance through years two, three and onward. An ongoing and sustained compliance approach is critical to a company’s hope of extracting value from their efforts. This session will discuss the challenges and opportunities your company may encounter in the near future and how it affects your responsibility as an audit committee member.

Internal Control Concepts

Corporate failures and regulatory requirements related to executive certifications of financial statements have created a need for all business executives to understand rudimentary internal control jargon and concepts. An understanding of internal controls can help every director to navigate new requirements. Avoiding academic exercises and overly technical concepts, this presentation provides attendees with the basics.

SEC Reporting: Key Requirements and Developments

The SEC issues numerous rules and regulations to enforce securities laws. Two of the most important regulations are Regulation S-X, which provides guidance on accounting, and Regulation S-K, which provides guidance on disclosure. This course presents these regulations, along with explanations and examples of some of the principal required forms that the company files with the SEC.

Regulatory Update

This program provides an update of the current regulatory environment, exploring recent changes and forward-looking trends.

Management Discussion & Analysis (MD&A)

A fundamental component of required financial statement disclosures is a description of the company’s financial condition and changes in financial condition. The purpose of the MD&A is to help investors better understand the key factors that affect the company’s financial performance, with an emphasis on the company’s prospects for the future. This session provides a background on the regulatory requirements for MD&A and highlights sections of the MD&A specific to the company.

Ethics and Compliance Program Oversight

Amendments to the Federal Sentencing Guidelines in 2004 include a number of recommendations for board oversight. The nature and impact of the guidelines will be discussed, followed by an overview of practical approaches to implementing the recommendations.

Risk Oversight

Increasing responsibility is being placed on directors to understand the full range of risks and exposures faced by the companies they are charged with governing. This session explores leading practices for understanding and addressing the organization’s state of preparedness to manage risks.

Overview of International Financial Reporting Standards

Global financial markets demand consistency in the application of accounting standards and methodologies used in financial reporting. Today, some global companies are converting to International Financial Reporting Standards (IFRS). This course provides an overview of IFRS and compares some of the most significant accounting standards with those required under GAAP in the United States.

Antifraud Programs and Controls

This session provides an overview of the respective responsibilities of the board and audit committee in preventing financial statement fraud. Common red flags and areas of heightened risk will be highlighted.

Doing Business in Emerging Markets

This program will provide an overview of the challenges and opportunities facing companies as they consider expanding their business ventures in emerging markets. The session will highlight, at a macro-level, the typical risks when considering management’s expansion plans. Also, we will examine how these risks apply to the core growth markets: Brazil, Russia, India and China.

Technical Accounting Updates

Public company financial reporting is becoming increasingly complex. Understanding financial statements can be a challenge for even the most seasoned director. There are numerous accounting standards and many estimates, judgments and assumptions that are an inherent part of the financial reporting process. This series of topics will begin with a general overview of current developments from the SEC and FASB. Topics will focus on selected critical accounting policies, presented in non-technical language at a level that is commensurate with the duties and obligations of audit committee members.

Note that programs can also be developed around specific accounting and financial reporting issues of interest to the company’s audit committee.

For more information, contact : Stephanie Joseph The Directors' Network sjoseph@directorsnetwork.com (212) 754-3086 or Nicole Sandford Deloitte & Touche nsandford@deloitte.com (203)708-4845.