When a company faces allegations that question its corporate integrity, it is critical that the Audit Committee take an active leadership role in the conduct of the investigation. Following numerous corporate scandals and corresponding regulatory actions, many believe that it has become an advisable “rule of thumb” to engage the Audit Committee members in the investigative process, especially when pivotal factors include one or more of the following:

• Allegations are related to accounting or financial reporting and there is evidence that the allegations could be material
• Allegations involve members of senior management
• Allegations could have significant impact on the company’s reputation

The specific role of the Audit Committee in the investigation process—whether advisory or direct oversight in nature—depends on the significance of the matter under investigation. The decision to bring an investigation to Board-level attention can be a subjective one. However, forensic professionals often urge companies to err on the side of caution. As one forensic professional observed, “If you have to think about it for 60 seconds, you probably ought to move it up to the Board.”

Learn more in the attached white paper, based off of a Dbriefs Webcast presented by

• Rob Cepelik, partner, Forensic & Dispute Services, Deloitte Financial Advisory Services LLP
• Sam Seymour, partner, Sullivan & Cromwell
• Steve Wagner, managing partner, U.S. Center for Corporate Governance, Deloitte & Touche LLP