Audit Committee Bulletin
Increasing demands for transparency and the requirements of ever-changing standards are continuing to have an impact on the work of audit committees.
In this edition of the Audit Committee Bulletin, we summarize some of the issues that audit committee chairs of leading European companies are currently discussing with EY. Topics include:
- IFRS 15 – a transformational new standard: The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) have issued new revenue recognition standards that will supersede nearly all existing requirements under IFRS and US GAAP. We explain the core principle of IFRS 15 Revenue from Contracts with Customers, explore the areas that require significant judgment and detail a five-phase model for implementing accounting change.
- Global focus on tax base erosion and profit shifting: Now is the time for companies to review their business models and structures against a growing number of Organisation for Economic Co-operation and Development (OECD) recommendations. We highlight key points of the OECD-driven Base Erosion and Profit Shifting (BEPS) project, investigate the role it is expected to play in reshaping country tax laws and discuss how audit committees can respond.
- Managing tax controversy: Tax disputes can affect a company financially, diminishing shareholder value and damaging reputation. Implementing more global, strategic approaches to managing tax risk and controversy can help companies assess tax controversy risks more accurately and prioritize which disputes and disagreements to tackle first. In response to the growing uncertainty associated with this new era we explore how companies are trying to manage their tax risks more effectively.
- Dialogue with the IAASB: At a session of the European Audit Committee Leadership Network in Paris on 18-19 November 2014, members were joined by Professor Arnold Schilder, Chairman of the International Auditing and Assurance Standards Board (IAASB), and Dan Montgomery, recently retired Deputy Chair of the IAASB and retired EY US senior partner. Participants discussed the role of the IAASB and aspects of its activities that are of interest to audit committees, including proposed standards on enhanced auditor reporting and how auditors should review “other information” beyond the financial statement.