TheCorporateCounsel.net

Last week, Deloitte’s Center for Board Effectiveness and the Center for Audit Quality (CAQ) released the third edition of Audit Committee Practices Report: Common Threads Across Audit Committees.

A total of 266 respondents participated in the survey, mostly representing larger US companies. The respondents cited cybersecurity as their No. 1 priority, with enterprise risk management cited as the No. 2 priority, with finance and internal audit talent, compliance with laws and regulations, and finance transformation rounding out the top five priorities. Trending topics such as artificial intelligence governance and ESG reporting received comparably less attention.

On the topic of Audit Committee effectiveness, respondents highlighted three key areas for improvement:

1. Increased discussion and/or engagement from members during meetings — highlighted by 29% of respondents.
2. Improved quality of pre-read materials — highlighted by 28% of respondents.
3. Improved quality of presentations during meetings — highlighted by 26% of respondents.

It is interesting how the focus of the audit committee has changed just over just the past year. The report notes that last year’s survey identified ESG disclosure and reporting as among the top-three audit committee priorities, behind cybersecurity and enterprise risk management. The report also addresses the topics of audit quality, audit committee turnover and rotation and audit committee expertise.

– Dave Lynn