Audit Committee Effectiveness Framework
Effective and demonstrable delivery of this oversight role builds trust—both today and in the future.
Audit committees (and their chairs) provide critical and objective oversight for companies over risk, control, audit, assurance, corporate reporting, ethics, and compliance (if required by law, corporate governance codes, or agreed to in the scope of the audit committee mandate). Effective and demonstrable delivery of this oversight role builds trust with stakeholders that the board is operating in their best interests—both today and in the future.
The work of the audit committee has never been more critical. In today’s world, investors, other key stakeholders, and regulators demand ever-more comprehensive and robust corporate reporting that extends well beyond the company’s financial performance.
As the demands and expectations of the audit committee continue to grow, audit committee effectiveness is essential to help ensure that the committee is equipped with the capabilities, processes, and resources to best fulfill its role.
The Audit Committee Effectiveness Framework can be used and applied in several ways. For example, the framework can be used as a self-assessment tool for the audit committee chair to consider, individually or in discussion with other members of the audit committee. It can be used to frame a conversation with the chair of the board or to guide and inform specific topic-focused discussions with management or assurance providers. The framework can also form the basis of a facilitated conversation with a trusted external party to challenge and set objectives for understanding and informing both current and future states of the effectiveness of the audit committee.
