TheCorporateCounsel.net

The Center for Audit Quality & Audit Analytics are out with the 9th annual “Audit Committee Transparency Barometer.” The report gauges audit committee disclosure of external audit committee oversight activities in the S&P 1500 – broken down by trends in the S&P 500, S&P MidCap 400 and S&P SmallCap 600.

This year’s report shows an uptick in many key areas – including info about the audit committee’s role in cyber risk oversight and ESG oversight:

– 54% of the S&P 500 audit committees reported having responsibility for cyber risk oversight, an 8% increase since 2021

– For S&P 500 companies, 39% of audit committees disclosed having an ESG or sustainability expert on the board, while 18% of audit committees disclosed responsibility of oversight of ESG

That said, there are also opportunities for improvement when it comes to transparency – specifically, around the audit committee’s decision process for external auditor engagements. The CAQ’s press release highlights these stats:

– While 71% of audit committees of S&P 500 companies disclose auditor tenure in the proxy statement, only 9% of such audit committees disclose how the audit committee considers length of auditor tenure when re-appointing the external auditor

– While 51% of audit committees of S&P 500 companies disclose that they are involved in the selection of the audit engagement partner, few disclosed what their involvement in the selection of the audit engagement partner entails

– Liz Dunshee