Issues Related to the Assessment of the Effectiveness of Management Review Controls: Roundtable Summary

The Center for Audit Quality and the Financial Education & Research Foundation (FERF) of Financial Executives International (FEI) commissioned John Fogarty, Mark Beasley and Doug Prawitt to conduct an independent qualitative research study on Internal Control over Financial Reporting (ICFR) management review controls (MRCs), Perspectives on Management Review Controls: Challenges and Solutions (the Research Report). The research involved a series of detailed, semi-structured interviews with preparers – in particular the control owners and control performers – followed by separate interviews with the participating companies’ auditors.

To obtain perspectives of preparers and auditors who did not participate in the research study, the CAQ and FERF hosted a virtual roundtable. The discussions were designed to further explore areas that continue to create challenges in implementing effective design, precision, and operation of MRCs and the related documentary evidence issues associated with assessing their effectiveness. The primary objective of the roundtable was to identify and share leading practices that can mitigate the challenges that preparers and auditors have in addressing these often highly subjective controls.

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