Audit Committee Practices Report
Common Threads Across Audit Committees
Key findings
As the regulatory environment grows in complexity and organizations address new and continuing challenges, additional expectations are placed on audit committees. The scope of audit committee responsibilities continues to expand beyond the traditional remit of financial reporting and internal controls, internal and external audit, and ethics and compliance programs.
This edition of the report is based on the survey results of 266 audit committee members, most of whom are from US public companies (74%), and of which 81% have more than $700 million in market cap. The survey questions focused on the main oversight areas within the audit committee’s purview and identified the top priorities for audit committees over the next 12 months.
In addition to financial reporting and internal controls, the committees expect to focus primarily on cybersecurity and enterprise risk management.
The third priority wasn’t quite as clear, with three topics clustered closely together:
- Finance and internal audit talent (37%);
- Compliance with laws and regulations (36%);
- Finance transformation (33%).
Audit committee practices and effectiveness
In addition to audit committee priorities, respondents provided insights into how audit committees can further enhance their practices and effectiveness. Eighty-nine percent of respondents feel there is adequate meeting time for addressing all items on the audit committee agenda. Yet most respondents (65%) also indicated there was at least one strategy that might improve the committee’s effectiveness.
Additional insights
The full report dives into additional findings that may help stimulate conversation among audit committee members and those who interact with them. These insights include:
- Where ESG reporting and artificial intelligence governance fall on the agenda;
- Internal audit effectiveness;
- Time spent in audit committee meetings;
- Audit quality;
- Audit committee turnover and rotation;
- Audit committee expertise;
- An appendix of all survey data.
