As the accounting profession continues to be impacted by the creation of new pronouncements, laws and regulations, educators continue to find new ways to effectively shape the next generation of accounting professionals. Dr. Stephanie Weidman, chair of the Department of Accounting and Finance at Rowan University, and Jerry Maginnis, CPA, executive in residence at Rowan, recently showed us how an audit committee meeting works first hand. Accounting students, many of whom will soon be graduating and entering the professional workforce, were invited to observe a simulation of a real-life audit committee meeting.
Members of the Rohrer College of Business’ Accounting Advisory Board (listed below) served as the actors in this simulation:
- Tom DiVittorio (Genesis Health) – assuming the role of CFO
- John Erdman (TD Bank) – assuming the role of controller
- Leonard Gatti (Comcast Corporation) – assuming the role of audit partner
- Raymond Jewusiak (KPMG) – assuming the role of audit senior manager
- Jerry Maginnis (KPMG, retired) – assuming the role of audit committee chair
Throughout the simulation, these individuals drew upon their respective professional backgrounds to realistically portray the interactions that typically take place during these meetings. Utilizing information from an actual publicly traded company based in south Jersey, the participants discussed matters such as company performance; the financial impact of new accounting standards and tax laws (e.g. tax reform, revenue recognition); the results of the audits of the financial statements and of internal control over financial reporting; significant findings and remediation efforts; and other topics including auditor independence and responsibilities under the Public Company Accounting Oversight Board (PCAOB).
Participants addressed differences between the simulation and reality; for instance, they noted that, ordinarily, legal counsel, internal auditors and other pertinent parties would attend these meetings. Moreover, although they had used the financial data of an actual company, they incorporated fictional scenarios, such as a cybersecurity breach, to illustrate how a company would work to remediate such issues and to mitigate the risk of future incidents. The individuals playing the auditors also noted more recent changes to auditing practices, including critical audit matters and the disclosure of auditor tenure and how these changes may affect the future of auditing services.
One aspect of this meeting that I found particularly interesting was the executive sessions with management and the external auditors. This portion of the meeting provided insight into the working relationship between the managers and auditors, which was very enlightening, especially when each party had the chance to voice any concerns about the audit.
For many of us, this simulation also provided a glimpse into our future careers. This event helped me to form my own career expectations and has made me more excited as I look forward to starting my new position as an auditor for Grant Thornton this September. In general, these sessions illustrated the realities of working with clients in public accounting, but, most importantly, they stressed the need for open and honest communication between companies and their auditors.