Hats Off…
December 10, 2021

Last week we hosted our third annual Audit Committee Forum. This year’s program came from discussions with our clients, current industry trends and feedback from last year’s attendees. Our goal was to provide forward thinking and innovative ideas to enhance audit committees’ operations and provide attendees with the guidance necessary to be more effective.

We are committed to sharing valuable information – with our clients, colleagues, friends, the industries we serve and the CPA profession – so we’ve shared insights from the forum (http://www.parentebeard.com/auditcommitteeforum/) to inform and educate members of audit committees and boards of directors on the current best practices for businesses in this uncertain economy.

In today’s fast moving environment, risk management is critical for CEOs and boards. Regulatory authorities are constantly issuing new requirements that mandate more explicit information on risks and risk management practices. Combined with the heightened scrutiny brought on by recent negative headlines about well-known companies such as Groupon, Amazon, Google and, surprisingly, HP and Autonomy, boards and committees are feeling more pressure than ever before. These individuals now face the same scrutiny for failure to comply with expected standards and will be held just as accountable as the companies they serve.

The interplay of the various risk and compliance requirements forces companies to go beyond managing risk in silos and create an integrated risk management function. In other words, instead of wearing just one hat in a particular area of expertise like marketing or finance, members of an audit committee are forced to wear many hats. The issues are all connected.

While risk can never be eliminated, companies that move beyond traditional risk management to implement more comprehensive enterprise risk management strategies will be in a much better position to prevent, minimize or recover from losses in shareholder value.

It’s time for committee members to remove their individual hats, whether financial, marketing, management, or other, and consider different ways of thinking.

Thanks for stopping by.

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