CAQ provides audit committees tool for oversight of emerging technologies
The Center for Audit Quality released a new resource providing a framework and questions that audit committees may be asking as new technologies impact the financial reporting process.
The publication, “Emerging Technologies: An Oversight Tool for Audit Committees,” is based on the work of the Committee of Sponsoring Organizations of the Treadway Commission and has five key components:
• Understand the company’s emerging technology strategy and any specific technologies contemplated
• Understand management’s risk identification and assessment process
• Understand the control activities in place that respond to the identified risks
• Establish information and communication protocols
• Monitor emerging technology activities
Each of these categories contains questions to be discussed by audit committees, auditors and management.
"Today's technological innovation has revolutionary potential for both public company auditing and financial reporting," said CAQ executive director Cindy Fornelli in a statement. "While emerging technologies present exciting opportunities to enhance audit quality and the financial reporting process, these opportunities are not risk-free. This CAQ resource can help audit committees to build trust and to execute their responsibility to oversee the financial reporting process in an era when technology's capacity to disrupt has never been greater."
The publication also specifically highlights artificial intelligence and robot process automation, and the significant impact both will have on financial reporting.