This sample audit report assesses a company's equity compensation processes and related activities.
The equity compensation process is an evolving area that has an extremely high level of visibility and risk for many organizations. The requirements of FAS 123 (R) are exacting from both a form and substance perspective. It is essential that a robust and appropriate control structure be in place to mitigate risk in this area to an acceptable level.
The equity compensation process requires a clear understanding of roles and responsibilities by process owners in order to be effective and mitigate risk to an appropriate level. These roles and responsibilities should be fully defined and documented, and each process owner should understand the relationship between their area of responsibility and others within the process. This is especially critical where there is no single process owner assigned responsibility across all functional areas.