Audit Committee Brief: November/December 2011Tax complexities drive audit committee oversight |
Tax matters continue to be one of the leading sources of material weaknesses and restatements. The SEC has increased the scrutiny of tax issues as a result of the significant judgment involved, and it is one of the agency’s most frequent areas of review. To lessen the likelihood of material weaknesses, restatements, IRS audits, litigation, and other negative developments, it is important for audit committees to assess tax-related risks in their financial reporting oversight role. Due to the complex nature of taxes and related risks, audit committees should assess whether they have the background to evaluate these matters and, if not, how they will gain an appropriate understanding.
This Audit Committee Brief can help audit committee members to better understand where efforts to monitor tax concerns can be focused and to familiarize themselves with the most common categories of problems identified.
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Audit Committee Brief: November/December 2011
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