Monitoring Risk in Financial Reporting

The 18th Annual Financial Reporting Conference, hosted by Baruch College this past May 2, once again brought together regulators, standards setters, preparers, auditors, and users to discuss current topics in accounting, auditing, and reporting.

A common theme in the discussions at this year’s conference was the variety of risks that stand in the way of useful financial reporting. Investor confidence rests on the quality and reliability of the reports and the assurance given them. Cybersecurity represents a material, and perhaps critical, issue for all businesses, and the standards governing its reporting and assurance are still being developed. Regulators such as the PCAOB and SEC consider this to be an area of growing concern and are focusing their attention on how to address cybersecurity risks and report to financial statement users. Another topic of concern to all of the speakers was the ability of financial reporting standards and processes to keep pace with a constantly shifting business landscape. Concerns about transparency, international comparability, and sustainable practices featured significantly in the debate over the direction of financial reporting.

The speakers at the conference each shone a light on a different piece of the financial reporting landscape. SEC Chief Accountant Wesley Bricker spoke about the past, present, and future of financial reporting, highlighting trends that regulators, issuers, and other stakeholders must focus on to ensure confidence in the capital markets. FASB Chair Russell Golden gave an overview of his board’s efforts to coordinate with and learn from international standards setters in order to craft a higher-quality accounting standards. And in her keynote address, PCAOB Board Member Kathleen Hamm laid out the dangers that interconnectivity poses to the financial reporting system and the steps the auditing profession can take to improve cybersecurity and properly manage the risks inherent to businesses operating in a digital world. Panels throughout the course of the conference covered the current activities of the SEC, the experiences of preparers as they implement the new leasing and revenue recognition standards, other reporting developments affecting both public and private companies, and recent regulatory activity on financial instruments. Panelists included representatives from Moody’s, Google, Financial Executives International (FEI), KPMG, Ernst & Young, Deloitte & Touche, and PricewaterhouseCoopers.

The following articles include presentations from the featured speakers as well as summaries of the panel discussions held throughout the day. The comments and opinions expressed at the conference and reproduced here represent the speakers’ own views and not necessarily those of their employers, affiliated organizations, colleagues, or staff.