What will 2019 bring? An executive briefing for board members
Highlighting key financial, regulatory and governance issues
RECORDED WEBCAST |
2019 is presenting itself as another year of rapid technology changes, a tightening talent and labor market and numerous disruptors. To ensure you and your audit committee are prepared, join us for an executive briefing for corporate leaders, audit committee members and board members. We’ll share insights on key financial, regulatory and governance issues; how blockchain will be disruptive to the middle market; and important economic insights for 2019.
During this webcast, you will gain valuable insights on:
- Blockchain’s disruption to the middle market
- An overview of cryptocurrency and digital assets
- The changing regulatory landscape
- An economic outlook for 2019
Our 2019 executive briefing for board members provided insights on a potpourri of key financial, regulatory and governance issues, including the following, among others:
- Cybersecurity – In answering a polling question, almost 60 percent of our webcast participants indicated they had been affected by a cyber-related fraud. The SEC has sent a clear message that it expects issuers to (a) institute appropriate controls to mitigate the risks of cyber-related threats; (b) safeguard company assets from those risks; (c) act responsibly in the event of a cybersecurity incident; and (d) promptly and fully disclose data breaches and other cybersecurity incidents. The SEC has put issuers on notice that it will pursue enforcement actions for issuers who do not meet these expectations. The National Association of Corporate Directors’ Director’s Handbook on Cyber-Risk Oversight is a good resource for directors with respect to cybersecurity.
- Financial reporting matters – Over the next year, the SEC staff is expected to focus on disclosures about how companies will be affected by new standards for leases and credit impairment, and disclosures about cybersecurity, among other matters. Also, as discussed more fully in Critical audit matters: Information for audit committees, a Public Company Accounting Oversight Board standard will require the auditor’s report to disclose critical audit matters (for fiscal years ending on or after June 30, 2019 for large accelerated filers). Planning for these disclosures should be discussed in 2019 by all companies because sensitive matters could be among those publicly disclosed as critical audit matters for the first time.
- Blockchain’s disruption – A blockchain is a ledger where transactions are recorded and confirmed anonymously, providing a record of events that is shared between many parties and cannot be altered. Blockchains are used for storing value (using “coins” to efficiently facilitate money transfers), computing transactions (i.e., payment is made when a coded objective is met), and storing information (e.g., food traceability and transparency, such as tracking a mango from the tree to the grocery store, including the temperature inside the distribution truck during transit). What problems exist in your company that could be solved through blockchain, resulting in a competitive advantage by reducing labor costs or increasing efficiencies?
- An economic outlook for 2019 – RSM currently is forecasting 2.2 percent growth in 2019 with downside risk. The U.S. labor market outlook is robust with the unemployment rate heading to 3.4 percent, and there likely will be upward pressure in wage growth in 2019. The Federal Reserve is forecasting two rate hikes in 2019, probably in the last half of the year. The RSM recession probability model is currently at 21.35 percent, indicating elevated risk, with the 30 percent level being a threshold where likelihood of a recession becomes more imminent. Key 2019 business considerations include stress testing and financial modeling for many factors, including the tight labor market, regulation, supply chain and banking.