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The audit committee of a financial services company plays an essential role in the financial reporting process, including the interim financial reporting process. On a quarterly basis, it is important for the audit committee to discuss with management and the auditors changes in the internal control system that could impact the financial reporting process. They should also discuss the financial statement impact of any changes in critical accounting policies or in the application of such policies. Management should brief the audit committee about the company's procedures for developing and summarizing quarterly financial information. The audit committee should understand how the quarterly financial close process might differ from the annual financial close process. The audit committee should also review any significant year-end issues that could affect the financial integrity of interim accounting practices. The audit committee should receive certain material to review before the earnings release, including a draft earnings press release and key performance measures. The committee, or at least the chairperson, should discuss and review interim financial information with management and auditors prior to the filing of the company's Form 10-Q. An in-person discussion is preferable for this purpose, but a conference call may suffice. This commentary was written by Dan Trigg, national financial services practice director. Trigg focuses on ensuring that our financial services clients receive high-quality effective and efficient services. In that capacity, he has also worked with many of the national and state financial industry associations, assisting them in the areas of education, problem solving and regulations.
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