The fact that the rules imposed upon private entities are less rigorous than those governing the public
Question:
The fact that the rules imposed upon private entities are less rigorous than those governing the public sector is not an excuse for private companies to be lax. With strong governance, companies can mitigate the risk of fraud, theft, and embezzlement. However, going through the effort of independent monitoring and oversight does not require private companies to rewrite the rules.
By satisfying the matrix of responsibility that public companies must follow, private entities will ultimately save themselves from headaches (or worse) down the road. Avoid taking the “only what’s required” attitude. Instead, strive for the highest bar.
Given the mounting pressures that companies face today to do more with fewer resources, the audit committee is more valuable than ever. By taking a fresh look at the inner workings of an organization, the audit committee provides the professional experience needed to assess the organization’s corporate-level risks, discuss the areas of greatest risk and create appropriate work plans to mitigate those risks.
In addition, by monitoring a company’s control environment and overseeing its ongoing risk mitigation activities, a good audit committee will complement existing audit activities and enhance the overall quality of the organization’s corporate governance.
Accounting Tools for Business Decision Making
ISBN: 978-1118128169
5th edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso