- Companies' audit committees mostly handle their COVID-19-related workload without trouble despite having to conduct their business remotely, a KPMG survey finds.
- But almost two-thirds of audit committee members reported intensified responsibilities as they work with company management to capture the impact of the pandemic in their accounting and financial reporting, KPMG found.
- "The uncertain trajectory of COVID-19 — coupled with the extensive use of forward-looking information in financial statements and SEC filings — have made disclosures ... a top area of focus," the report says. The report was based on input from 114 audit committee chairs and members.
How to measure company risk factors, track liquidity, and make changes to the management, discussion and analysis (MD&A) section of financial reports are among the topics dominating committees.
Forecasting cash flow and calculating impairment of goodwill and other non-financial assets are other big topics, the report said.
All public companies have audit committees to help guide the CFO and finance and accounting teams in their work. They help ensure financial statements are accurate, and, if they see weaknesses, bring in external auditors.
They also assess the finance team's budgeting and forecasting and implementation of internal controls and risk assessments.
Remote work's limited impact appears to be one of the silver linings of the survey findings.
Although 62% of committee members say they're reassessing their workload because of COVID-19, remote work hasn't posed a problem. Almost 80% say there's been no impact on the working relationship between the committee and the CFO and 7% say it's even improved. Responses to committees' work on financial management and with business unit leaders and auditors, both internal and external are similar.
"Remote is not ideal, but it's working," the report says.
Committees don't feel pressure to return to in-person operations. A third of committee members say their CFO can work remotely indefinitely without hindering operations and they gave similar responses for other functions.
Respondents most want business unit leaders to return to the workplace, although 28% say they could work remotely indefinitely.
Returning to work
One of the areas committees are focusing on is their company's plan for getting employees back to the workplace.
Almost three-quarters of committee members say it's the top item on their internal control agenda, and almost 40% say evaluating the return-to-work plan and its associated risks is a focus of their internal audit duties.