“Oversight of the implementation of new accounting standards is an important part of the audit committee's responsibilities, and revenue is one of the most important financial reporting measures,” said CAQ Executive Director Cindy Fornelli.
Washington, DC (PRWEB) December 13, 2016
The Center for Audit Quality (CAQ) released a tool to help audit committees assess a company’s implementation of the new revenue recognition standard, which will take effect for many public companies on January 1, 2018.
With little more than a year before the standard takes effect, only 17 percent of public companies report being in the implementation phase, according to a recent survey of executives by PwC and the Financial Executives Research Foundation. Seventy-five percent indicate that they are still assessing the impact of the new standard, while 8 percent report that their company has not begun assessment and implementation.
“Oversight of the implementation of new accounting standards is an important part of the audit committee's responsibilities, and revenue is one of the most important financial reporting measures,” said CAQ Executive Director Cindy Fornelli. “The CAQ is pleased to provide this tool to help audit committees oversee the implementation of the new standard, including their interaction with external auditors on the subject.”
The CAQ’s Preparing for the New Revenue Recognition Standard – A Tool for Audit Committees is organized into four sections to provide audit committees information that may be helpful.
I. Understanding the New Revenue Recognition Standard – What Is It? This section provides a brief overview of the core principles of the standard.
II. Evaluating the Company’s Impact Assessment – How Will Revenue Recognition Change? This section assists audit committees in discussing with management and auditors the impact of the new standard due to various factors related to the company’s business.
III. Evaluating the Implementation Project Plan – How Do We Need to Prepare? This section assists audit committees in their efforts to understand and evaluate management’s implementation project plan.
IV. Other Implementation Considerations – What Else Do We Need to Consider? This section assists audit committees with other considerations such as transition decisions and new disclosure requirements.
In addition to key questions for audit committees, the tool offers audit committees a list of the resources on revenue recognition that have been developed by CAQ member firms and the American Institute of CPAs.
The Financial Accounting Standards Board and the International Accounting Standards Board jointly issued the sweeping new revenue recognition standard in 2014.
For more CAQ resources related to audit committees, visit the CAQ's audit committee resources page.
The Center for Audit Quality (CAQ) is an autonomous public policy organization dedicated to enhancing investor confidence and public trust in the global capital markets. The CAQ fosters high quality performance by public company auditors, convenes and collaborates with other stakeholders to advance the discussion of critical issues requiring action and intervention, and advocates policies and standards that promote public company auditors’ objectivity, effectiveness, and responsiveness to dynamic market conditions. Based in Washington, DC, the CAQ is affiliated with the American Institute of CPAs. For more information, visit http://www.thecaq.org.