The Center for Audit Quality is offering some guidance to audit committees on how to ensure that senior management is ready to adopt the new lease accounting standards that take effect at the start of next year.
Preparing for the Leases Accounting Standard: A Tool for Audit Committees is designed to help audit committees exercise their oversight responsibilities as companies implement a new leases accounting standard that begins to take effect in January 2019. The tool includes an overview of the new standard and offers important questions for audit committee members to consider for successful implementation.
The new standard, adopted by the Financial Accounting Standards Board in 2016, requires all public companies to reflect assets and liabilities associated with leases on the face of the corporate balance sheet and in the income statement. In the 12-page paper, CAQ warns audit committees about concerns regarding corporate readiness for the new standard.