Ever-increasing burden of financial and industry regulation

AD&S boards of directors and management are also subject to unique rules and regulations. In the commercial market, products must be manufactured according to strict quality standards and certified before use. Price competition is fierce in the commercial market, so meeting customer specifications and delivery schedules are critical to success.

In the Defence market, there are similar strict quality and inspection requirements. Because of limited price competition, military contractors receive extensive oversight in the areas of pricing, cost accounting, purchasing, government property and material management. Both civil and military products and intellectual property are subject to export control rules. Now, the environment is becoming an increasing concern in boardrooms with carbon emissions regulations starting to impact the sector. With compliance periods identified for 2012, companies will need to treat this as a strategic business issue rather than merely a matter of environmental compliance.

At the same time, while AD&S companies have long been accustomed to dealing with government oversight and special accounting requirements, the future challenge is in maintaining a strong financial control framework that adapts to changing market risks. A well-designed control structure and self-governance programme can reduce shareholder lawsuits and whistleblower actions and provide an effective early warning system on major programmes.

How PwC can help you

To help clients manage and address the applicable regulatory restrictions, PwC has AD&S expertise in the following areas: export controls, governance, risk and compliance, and government contracts. Specifically, our credentialed export controls group provides: export compliance process and business development reviews, analysis of screening mechanisms, license applications, technology transfer & deemed export procedures, domestic and global export compliance assessments, and more.

Our fraud risk and controls experts can help identify significant fraud risk and develop management responses, including prevention and detection controls, key fraud risk indicators, and fraud monitoring and auditing programmes. In addition, AD&S tax specialists can provide the full spectrum of support from tax planning and strategy through compliance services.