Why key performance indicators are a key tool for audit committees
Audit committees should develop a robust process to effectively oversee KPIs presented in an issuer's MD&A and earnings press releases. Here’s how.
KPIs are crucial to meeting the informational needs of stakeholders by providing insights into an issuer’s overall strategic and operational performance. Given the increased focus on KPIs and the broad oversight responsibilities of audit committees, many of these committees may benefit from guidance on how best to approach this topic.
It is important for your audit committees to fully understand the oversight role they can play, such as helping to develop effective processes around KPIs.
Key Takeaways:
- a description of each of the four KPI categories often presented in Management’s Discussion and Analysis (MD&A) and earnings press releases
- a summary of the responsibilities the audit committee, board, management and external auditors have in selecting, calculating and presenting KPIs
- six characteristics to help review the appropriateness of management-selected KPIs
- a customizable tool intended to help deliver effective oversight of the KPIs presented in the MD&A and earnings press releases