27 Apr Effectively Communicating with the Audit Committee
Chief financial officers and other executives occasionally present information about the company’s operations, strategies, and risks to the audit committee. Your presentation will generally be most effective if you fully understand the committee’s role, you have already established relationships with committee members, and you focus on the most relevant information. Here is how.
The audit committee’s role
Audit committees act as gatekeepers over financial reporting. This means overseeing the accounting and financial reporting process.
In addition, the audit committee pays close attention to how a company manages risk and ensures compliance with relevant laws and regulations. The committee also evaluates whether the company’s control environment, including its internal and external audit processes, are effective.
With so much on their plate, the audit committee needs clear and concise reports and presentations that provide insight over raw data. To ensure your presentation resonates with committee members, ask for pointers from other executives who have experience presenting to the committee.
It also is a good idea to learn about the background of each committee member by reviewing their employment history, board appointments, and previous speeches or articles. Try to schedule time with the committee chair to establish a relationship and learn what matters the most to the committee. Time permitting, and with the approval of the chair, you can meet with each member of the committee to learn and address their concerns during your presentation.
Throughout your presentation, focus on the critical issues that require input from audit committee members. Save the details for the written materials submitted to members prior to the meeting.
The goal of written or verbal communication is to help committee members improve their understanding of the issues that fall within the scope of the committee’s responsibilities. To achieve this goal, provide sufficient detail to educate them, but avoid intricacies. Anticipate the type of questions committee members might ask, and if you receive a question you cannot answer with confidence, follow up later with a timely, relevant response.
Immediately after your presentation, document what you learned, including individual committee member reactions and areas of interest. Doing so can help you prepare for the next presentation.
An educated audit committee is an effective audit committee. Our team of external auditors is experienced in communicating with audit committee members about financial reporting matters and internal controls. If you are unsure how to connect with members of your audit committee, we can help you tailor your communications.