As we enter 2023, audit committees will have had no shortage of significant agenda items to address: the likelihood of a recession and rising interest rates; declining consumer spending; and continued deployment of new technologies, cloud transformations, and digitization to accommodate changing consumer buying behaviors. Meanwhile, environmental, social, and governance (ESG) priorities are gaining increasing attention, while supply chain reliability remains unsolved for most C&R organizations. And worker and talent shortages continue, although more in pockets than organization-wide.
Audit committees can expect their companies to be tested as the risk landscape becomes increasingly complex and interconnected.
We highlight eight issues for audit committee members to keep in mind as they consider and carry out their agendas for 2023.
- Stay focused on financial reporting and related internal control risks— understanding that economic and market volatility are bringing impairment risks back on the table.
- Understand the roadmap on implementing climate disclosure, broader ESG reporting, and remaining cautious of the risk of “greenwashing.”
- Make sure data governance including cybersecurity and customer privacy are top of mind in a growing digital-first world.
- Maintain a sharp focus on leadership, talent, retention, and new ways of working in the finance organization.
- Ensure adequate time is provided to the macro-economic risks and inflationary impact on merchandise, pricing and promotion, and customer demand.
- Maintain focus on business process and cloud transformation programs and related risks.
- Stay apprised of global tax developments and risks and understand the importance of tax in supply chain and ESG.
- Make sure internal audit is focused on the company's key risks in areas of change—particularly in technology and supply chain.