Mid-Market board members opine on financial reporting and governance issues.

• Author: Heffes, Ellen M.
• Position: CORPORATE GOVERNANCE

The 2013 BDO Board Survey reports on the opinions of corporate directors regarding a recent Public Company Accounting Oversight Board (PCAOB) proposal, cyber risk, social disclosure and more.

A key finding of the report, which surveyed middle-market public company boards with revenues from dollar 250 million to dollar 750 million, relates to the changes to the annual auditor's report in the PCAOB proposal. Less than one-third (27 percent) of public company board members believe the proposed changes will improve the usefulness of the report. Conversely, 45 percent say the changes will not improve the auditor's report.

Furthermore, 78 percent favor the report disclosing the length of the external auditor's tenure in the report; 67 percent are opposed to the auditor's report evaluating information beyond the financial statements for potential errors or misstatements that conflict with information obtained during the audit; and 52 percent oppose the report containing a discussion of critical audit matters that gave the auditor the most difficulty in forming its audit opinion.

"Clearly, corporate board members aren't sold on the usefulness of the PCAOB's proposal ... However, when you make changes to something that has been done the same way for more than 70 years, there is bound to be some pushback," said Lee Graul, a partner in the Corporate Governance Practice of BDO USA, which commissioned the report that was conducted in September by Market Measurement, an independent market research firm.

In other key areas:

* Social Disclosure: Nearly two-thirds (64 percent) of the 74 corporate directors responding to the...