Question

700- 1000 Words

“Cybersecurity: A new engagement opportunity” October 2017 issue - Journal of Accountancy

                        And

                        “How to deliver a powerful financial presentation October 2017 - Journal of Accountancy

Answer 1

(A)

As trusted business advisers, CPAs find ways to help their clients achieve their business objectives. Now, under the AICPA's recently issued cybersecurity reporting framework, CPAs have an opportunity to expand the services they offer to help clients manage and understand cyber risks. The framework is supported by two distinct but complementary sets of criteria that enable clients to describe their cybersecurity risk management programs and evaluate the effectiveness of controls within those programs. In addition, CPAs can use the framework to evaluate (and in some cases report on) the client-prepared cybersecurity information.

The new cybersecurity risk management framework creates opportunities for:

• An entity's management to describe its cyber­security risk management program.
• CPAs to perform a consulting engagement to help a client's management develop a description of its cybersecurity risk management program to provide to the board and other internal parties who are interested in that information.
• CPAs to perform a consulting engagement known as a "readiness assessment" to help a client identify where its cybersecurity processes and controls may need to be shored up.
• CPAs to perform a System and Organization Controls (SOC) for Cybersecurity examination engagement to assess the client's cybersecurity risk management program. Either or both of the consulting engagements may be performed as a prelude to the examination service.

The new engagements require specialized expertise, given the evolving nature of cyber risks, the potential for management to fail to identify appropriate risks, and a firm's potential liability for overlooking or underappreciating a cyber threat in its attestation. Because of the specialized skills required, many firms that lack the appropriate expertise will be unable to offer these services.

Nevertheless, for some firms the benefits of establishing the new practice line may outweigh the challenges. The primary reason is one of demand: Boards of directors and audit committees want greater assurance and transparency that the companies they serve are establishing effective cybersecurity management programs.

"Fast-changing regulations are being published with severe and prescriptive language, such as 'do this' and 'don't do that,'" explained Rod Smith, CPA, a managing director at Crowe Horwath LLP. "At the same time, there are a lot of different cyber risk frameworks in place today, some of them unique and others overlapping. Companies have to satisfy regulators' increased expectations, and until now [we] haven't really had a good vehicle to provide this assurance."

(B)

Presenting essential data without confusing or overwhelming your audience can be tricky. A common mistake is to share everything you know. Instead, concentrate on the essential information or suggestions you want the audience to take in.

In a new CGMA brief, Six Rules to Delivering a Powerful Financial Presentation, Peter Margaritis, CPA, CGMA, and Jennifer Elder, CPA/CFF, CGMA, provide the following advice on creating a session which connects with your audience and empowers them to act.

Focus on your audience’s needs

Give your audience the information they want first. You have very little time at the beginning of any presentation to capture their attention. Once you have their attention, you can cover what they need to know.

Make your message relatable

Think about how you can deliver your message in a way everybody can understand and relate to. Stories help provide relatable context, and humans are hardwired to want to listen to the whole thing, Margaritis says.

He uses the example of the CFO of an airline delivering an update on company performance to staff.

In this case, the presenter might reel off a set of figures for revenue, expenses, and profit in the billions of dollars. But few of us have ever seen, nor can we visualise, a quantity like $1.2 billion, for example.

A much more accessible context is, in this instance, the dollar bill. Margaritis suggests using that image on a PowerPoint slide to break down performance for every dollar a customer pays the company for the privilege of flying on the airline.

Tell the story behind the numbers

In a financial presentation, the presenter’s role is to translate the data into knowledge that is useful to the audience, covering these three points:

What? For example: Over the past two years, revenue increased by 25%.

So what? Explain why this fact matters. The only way to discover this is to get out from behind your desk and ask what the business did differently in the period that drove the change. A conversation with the head of sales, for instance, may reveal that a particular salesperson focused on building relationships with major companies over the period and secured a number of contracts. One of those contracts alone constituted half of that 25% growth. There’s the “so what.”

Now what? This is your chance to highlight what we can learn from this and suggest changes, such as encouraging the sales team to adopt a similar strategy to the star performer.