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Revenue Recognition Tool Helps Audit Committees and Finance Execs Prepare
Preparing to implement the new revenue recognition standard at your public company, private business, or other organization just got a little easier.
The Center for Audit Quality (CAQ) has released Preparing for the New Revenue Recognition Standard: A Tool for Audit Committees. Though the tool is primarily intended to help audit committees assess their organizations’ implementation of the new revenue recognition standard, controllers, CFOs, and management teams will find it invaluable as well.
The tool provides a wealth of information about the standard and includes questions for audit committees to ask management and auditors as they fulfill their oversight responsibilities. It also lists a variety of resources on revenue recognition, with links to executive summaries and technical guides developed by CAQ member firms and the American Institute of CPAs.
The tool is organized into four sections:
- Understanding the New Revenue Recognition Standard – What Is It?
- Evaluating the Company’s Impact Assessment – How Will Revenue Recognition Change?
- Evaluating the Implementation Project Plan – How Do We Need to Prepare?
- Other Implementation Considerations – What Else Do We Need to Consider?
The new standard will take effect for many public companies on January 1, 2018, and for other organizations on January 1, 2019.
Not just for audit committees
If you are a controller or CFO charged with implementing the new standard at your company, you’ll benefit from the tool’s concise overview of the new guidance and areas where revenue recognition could potentially change. You will also discover important considerations about processes and controls, the need for an implementation project plan, and how to keep the implementation effort on track. Whether or not your organization has an audit committee, other interested parties, including your auditors, will be concerned about how implementation issues have been addressed, so you can use this tool to focus on these areas before questions are asked.
The new standard has broad consequences and will affect all functional areas of your organization, not just accounting and financial reporting, so implementing it is no small task. The CAQ emphasizes the importance of your management team’s preliminary assessment of high-level impact, review of company culture, evaluation of required implementation resources, and inclusion of third-party consultants and vendors as part of the overall implementation plan.
How we can help
As the effective dates draw nearer, the CAQ advises that immediate preparation is imperative. If you haven’t yet planned for these changes, don’t waste any time going forward. CLA’s professionals have studied the new standard’s principles in depth and know how they will impact organizations in a variety of different industries. Our industry-specialized professionals offer tailored accounting and advisory services to help you implement the requirements with confidence and make the transition to the new standard as smooth as possible.