Law Firm Memo Outlines Strategies to Address Brexit, LIBOR Risks

A memo from lawyers at Weil, Gotshal and Manges discusses key risk, accounting and audit priorities for 2019. The topics include: Escalating risks around cybersecurity, Brexit and the transition away from LIBOR; New GAAP; and various accounting and audit issues. With respect to cybersecurity risks, the lawyers encourage re-evaluation of the adequacy of firms’ cybersecurity disclosures in light of SEC guidance. For Brexit risk, they advise careful evaluation of risk factors or other forward-looking disclosures of the anticipated impact of Brexit on licensing agreements, regulatory approvals, taxes, supply-chain relationships, financing and/or risk mitigation (swaps) arrangements, and any other aspect of a firm’s global business operations that might be affected by various Brexit scenarios. They also encourage firms to review their board presentations for disclosure decisions about Brexit and to be prepared to update and revise disclosures. For LIBOR risk, the lawyers say firms should be reviewing financial instruments and other contracts and/or assets that carry interest rates based on LIBOR and maturity dates that extend beyond 2021, with a view to mitigating future commercial and/or legal risk.