KPMG Comments on SEC Concept Release on Possible Revisions to Audit Committee Reporting Requirements
Sep 14, 2015
From the Financial Reporting View
KPMG LLP recently commented on the SEC Concept Release, Possible Revisions to Audit Committee Disclosures, which seeks feedback about 11 potential disclosure topics that would focus on the audit committee’s oversight of the audit and the auditor relationship, and whether changes to the disclosure requirements would enhance the usefulness of the disclosures for investors. The potential topics are categorized into three groups: audit committee’s oversight of the auditor; audit committee’s process to appoint or retain the auditor; and qualifications of the audit firm and certain engagement team members.
KPMG believes that audit committees play a critical role in overseeing auditors, and believes that greater transparency about the audit committee’s roles and responsibilities would contribute to increasing investor confidence. However, the firm expressed concern that a mandated one size fits all approach to creating new disclosure requirements could contribute to information overload, become a matter of legal compliance, or result in boilerplate disclosures of limited value to financial statement users. Thus, the firm recommended that rather than issuing proposed rules that would mandate prescriptive minimum disclosures, the SEC allow audit committee reporting to progress along its current path and trajectory, which includes customized discussions of how audit committees discharge their oversight responsibilities based on a registrant’s facts and circumstances.