Position papers on any matters being considered should also be made available. The committee should maintain minutes of each meeting. The Financial Reporting Process Financial reporting is a continuous process that provides management information and financial statements. To effectively review interim and annual financial statements, the committee must understand the company's business and industry, and the attendant risks. The committee should be satisfied that the key financial systems and the procedures and controls that support them will generate information necessary to manage and properly report on the operations of the company.
Information technology has a significant influence on financial reporting at most companies.
The committee should be briefed on the extent to which the financial reporting system is automated and the controls are in place to ensure the generation of reliable information and to provide computer security. Internal auditors and independent auditors should describe the results of their testing of computerized systems and their assessment of controls over them. Figure 4 lists some questions the audit committee may ask when briefed on computerized financial systems. The CPA Journal, June 1986.