2017 Private Company Audit Committee Outlook: What's on your audit committee agenda?

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Private company audit committees have full agendas and finite resources, which can make keeping abreast of certain items a challenge. This is particularly so in these times of ongoing disruption and increasing risks — risks that audit committees are responsible for overseeing.

Grant Thornton LLP has identified a number of items for audit committees in private companies to consider during the course of 2017. While specific issues will vary depending on the organization and its governance structure, industry, geographical scope and regulatory environment, we believe the following areas could have a potentially significant impact on private companies in the upcoming year and beyond.

Subscribe to Corporate Governor for regular audit committee insightsItem 1: Adjusting to potential policy and economic changes
Item 2: Addressing regulatory issues and accounting changes
Item 3: Overseeing cyberrisk
Item 4: Adopting data analytics
Item 5: Coping with intergenerational shifts
Item 6: Targeting the right level of governance

Download the full PDF - 2017 Private Company Audit Committee Outlook

A bit of background Audit committees in private companies are characterized by various levels of engagement. Some mainly review the financial reports; others review financial reports and actively advise the board on risks and other matters. Private company audit committees also range from informal to formal. Those in the latter group generally have a charter, hold regularly scheduled meetings, and fulfill explicit governance and risk-oversight responsibilities.

Levels of engagement and formality, as well as the actual governance and oversight functions, often but not always correspond to company size, industry, regulatory environment, geographical scope and ownership structure. For example, large companies in highly regulated industries with international operations and third-party investors, such as private equity firms, will tend to have more formal audit committees. Companies with the opposite of that profile may not have designated formal audit committees, and instead may have the full boards fulfill the review and risk oversight responsibilities that audit committees would typically execute.

The importance and urgency of the following potential agenda items will vary for a given organization. Some may be long-standing concerns that are becoming urgent, while others may arise from changes in the business, risk or regulatory environment. However, each of these items is at least worth considering in these times of disruptive change.

Toward enhanced governance and risk oversight Virtually every aspect of the business environment can now be characterized as disruptive, challenging and unpredictable. In their role as overseers of risk, audit committees can interact with management, the board and the internal audit function to develop the capabilities needed to not only protect assets, but also to boost performance and enhance value in this environment.

Companies that manage the risks that they can control, such as those regarding intergenerational shifts and regulatory compliance, will be better prepared to focus on those more outside their control, such as economic and marketplace change, and thus enhance their competitive advantage.

For audit committees, boards and executive teams in private companies, getting governance and risk oversight right stands among the major challenges in 2017 — and for the foreseeable future.

Contact Warren Stippich
Global Co-Leader Business
Risk Services
Grant Thornton International
Partner, Grant Thornton LLP
T +1 312 602 8499

Jim Maurer
Audit Partner
Consumer & Industrial Products
T +1 312 602 8736

Phil Quimby
National Director, Audit Marketing
T +1 202 861 4107