Overview
We believe it is important for Audit Committees to have access to insights and support on the important and emerging issues on the Board agenda and therefore PwC's programme for FTSE 350 (and equivalent) Audit Committee chairs and members offers a series of events featuring topics relevant to Audit Committees.
We have produced a summary based on current hot topic areas which were featured at our most recent Audit Committee Network virtual events to help Audit Committees with their year end reporting. The five areas we have taken a deeper look into are Accounting, Corporate Reporting and Governance, Regulatory and Audit, Fraud and Tax.
Accounting section
This overview provides an update to regulatory reminders and the current areas to focus on when thinking about year end reporting. Last autumn the Financial Reporting Council (FRC) identified areas that Audit Committee members need to consider including COVID-19 and climate change. These factors remain valid and are areas that boards should consider when signing off annual reports and general reporting in 2022.
Corporate Reporting and Governance section
In this section experts looked into the developments in corporate reporting, starting with reporting related to climate change as investors are increasingly looking into how organisations respond to climate-related risk and opportunities. The FRC has been much more active in the governance reporting space recently, and is now writing to companies about their governance reports as part of Corporate Reporting Review Team (CRRT) letters. It has also been giving a clearer steer on what is in line with the UK Corporate Governance Code or a departure from it.
Regulatory and Audit section
Restoring the Trust agenda, we are still awaiting the Government’s response to the BEIS consultation. Currently there is a high risk that the response might not make it onto the legislation to-do list for next year, which is frustrating for companies. But Audit Committees and Boards should consider opportunities for getting ahead of the change. In the Audit and Assurance policy there are large amounts of new and evolving information.
Fraud section
As we are in unprecedented times, it is essential that we look into why now is a good time to talk about fraud risk. Fraudsters have always tried to take advantage of emerging advances in technology and disruptive events. In this section we explore ways in which Audit Committees can protect, detect and respond to fraud.
Tax section
This overview covers the three current key themes for tax. The FRC’s focus on judgements and estimates is very relevant to tax. The two areas this typically covers are uncertain tax positions and deferred tax. Another focus and important to understand is whether you’ve got the right controls around tax accounting as a result of the BEIS report. And the third area is the OECD/ G20 framework which has undertaken ambitious reform around international taxation.
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