The Best Ways to Communicate Effectively with the Audit Committee
Now and then, CFOs and other executives present company information, like strategies, risks and operations, to the audit committee. Three key components will assist you in making the most effective presentation: thoroughly grasping the committee’s role; building relationships with committee members beforehand, and concentrating on the most pertinent information. Discover how.
The audit committee’s role
Audit committees act as gatekeepers over financial reporting. Specifically, they govern the accounting and financial reporting operations.
Furthermore, the audit committee looks closely at how a company manages risk and ensures compliance with relevant laws and regulations. The committee examines the company’s control environment and, more particularly, whether the internal and external audit processes are effective.
The audit committee can often be overloaded; they need clear and succinct reports and presentations that deliver insight over raw data. Get some suggestions from executives who have experience presenting to the committee. This is one way to make certain you resonate with committee members when you present.
Another way to connect with the committee is to learn about each member’s background, studying their employment history, board appointments and previous speeches or articles. Make it a point to meet with the committee chair. Establish a relationship with him or her and discover what matters most to the committee. If time allows, and with the approval of the chair, sit down with each member of the committee to understand and address their concerns during your presentation.
Concentrate on critical issues that call for input from audit committee members all through your presentation. Save the details for the written materials submitted to members prior to the meeting.
Help committee members better understand all issues surrounding the committee’s responsibilities through written and verbal communication. The best way to achieve this is to offer enough detail to educate them, but avoid minutiae. Try to prepare in advance for any committee members’ questions — and, if someone asks a question you can’t answer with confidence, follow up later with a timely, relevant response.
Take note of what you learned from the presentation right away, including individual committee member reactions and areas of interest. This will further your preparation for the next presentation.
An educated audit committee is an effective audit committee. If you’re uncertain of the best ways to connect with members of your audit committee, please call us at (818) 334-8623 or click here to contact us. Our team of external auditors is experienced in communicating with audit committee members about financial reporting matters and internal controls. We can help tailor your communications, as well.