The energy industry operates today in a “new normal”—lower crude oil prices and a future difficult to predict due to many uncertainties. It’s a transitional time for the sector, with companies finding ways to succeed in a lower price environment by using new technology, data and analytics, and robotics.
These changes in operations coincide with significant changes in financial rules that could lead to confusion for executives and directors. New tax laws, accounting rules, and risk strategies are challenging audit committee members to be more engaged than ever before. Our goal with this publication is to provide you a high-level review of current concerns facing audit committees that serve energy companies in order to help you focus on areas that may need increased oversight.
At first glance, several provisions in the new law could affect the energy sector, including the reduction of the corporate tax rate, the repeal of the Section 199 domestic production deduction, R&D credit changes, the Base Erosion Anti-Abuse Tax (BEAT) and other provisions. More information on the pivotal issues is provided in the following chapter on tax reform.
Download our 2018 Audit Committee Outlook for Energy to understand how recent and near-future developments impact corporate financial reporting and disclosure.
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