By Krista Parsons, Audit & Assurance Managing Director, Governance Services and Audit Committee Program Leader, Center for Board Effectiveness, Deloitte & Touche LLP; and Bob Lamm, Independent Senior Advisor, Center for Board Effectiveness, Deloitte LLP
With the new year comes Deloitte’s latest perspective about where audit committees should focus their attention in the year ahead. What developments could have an impact on audit committees in 2025, and what topics should they consider prioritizing? Deloitte’s new edition of On the Audit Committee’s Agenda offers insights to help you carry out the important—and ever-increasing—responsibilities of an audit committee member in 2025. Here’s a preview.
Staying up to date with evolving SEC and PCAOB priorities has long been a focus of audit committees. This year, the shift in administration and a new SEC chair will almost certainly bring changes in regulatory priorities. Although specific priorities are still to be determined, here are some things to keep in mind.
The rapid rise of artificial intelligence (AI) over the past year underscores another audit committee priority for 2025: technology risks.
ERM has been a key area of oversight of the audit committee for many years. As in the past, the audit committee should monitor ERM program effectiveness by asking questions such as:
Many companies are taking a deeper dive into ERM this year because of potential new risks associated with geopolitical uncertainty and GenAI, which may require a new level of scrutiny from the audit committee.
To manage their responsibilities more efficiently, audit committees should prioritize critical agenda items, use consent agendas for routine matters, and adopt other time optimization techniques. It’s also important to clearly delineate which issues fall under the audit committee’s purview and push back on areas that fit better in another committee or with the full board. Despite the significant focus on technology risk, many audit committees and boards have yet to leverage technology to enhance their own effectiveness, and GenAI could be a valuable tool in this regard. The audit committee chair plays a pivotal role in driving these efficiency initiatives and fostering consensus on adopting technological innovations to improve committee performance.
Deloitte has extensive experience advising audit committees on ever-increasing oversight responsibilities, leading practices, and effectiveness. Feel free to reach out to us with questions.
Endnotes
¹ Spencer Stuart, 2024 U.S. Spencer Stuart Board Index, accessed December 2024.
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