On the 2024 audit committee agenda: Consumer & Retail

Most consumer products and retail (C&R) companies finished 2023 with higher annual revenues helped by a better-than-anticipated economy, yet margins were impacted by inflationary input costs and a decline in consumer demand.

With these challenges and ongoing geopolitical and economic uncertainty as the backdrop for 2024, audit committees are looking at how their C&R companies will manage evolving risks, adapt to new rules and regulations, and determine proper financial reporting given the host of external factors on the horizon. Over the next 12 months, the industry will grapple with implementation, risk management and governance for new processes and technologies, as well as new disclosure and other rules around cybersecurity, sustainability, customer privacy and tax.

Our ongoing conversations with corporate directors and business leaders about developments in the C&R industry have helped us identify and provide insights around seven key issues for audit committee members in 2024:

• Ensure business processes, internal controls, and skills are in place to execute technology-enabled finance transformation while managing associated risks.
• Monitor compliance with the SEC’s new cybersecurity rules and customer privacy protections.
• Oversee compliance with expanding domestic and global sustainability regulations and climate disclosures.
• Define oversight responsibilities for generative AI and help establish a responsible governance framework for its advancement and adoption.
• Monitor evolving tax developments and risks, particularly around greater tax transparency.
• Leverage internal audit to review key risk areas, including the rise in retail theft.
• Maintain oversight of financial reporting and disclosure requirements and the control environment amid economic volatility and geopolitical uncertainty.