Last week, the Center for Audit Quality announced the publication of its 12th annual “Audit Committee Transparency Barometer Report.” The report is compiled by the CAQ and Audit Analytics to measure disclosures about financial oversight and other audit committee responsibilities. The CAQ’s announcement notes:

As audit committees navigate emerging risks including economic disruption and the rapid integration of artificial intelligence, investors need insights into board composition, expertise, and oversight processes. This year’s Barometer shows that while skills matrix disclosure continues at high rates and disclosure of cybersecurity expertise on boards has grown, most disclosure areas have stagnated or declined, providing audit committees with an opportunity to enhance transparency about their evolving oversight responsibilities.

Key findings of the report include:

– 90% of S&P 500 companies disclosed the board of directors’ skills matrix, an increase from 85% in 2024. S&P MidCap companies (80%) and S&P SmallCap companies (70%) also showed slight increases.

– 65% of S&P 500 boards disclosed they have a cybersecurity expert—representing a 5-percentage point increase from 2024.

– Stagnation and decline of audit committee disclosures were observed across several measures, including (for S&P 500 companies): disclosure of the annual evaluation of the external auditor (decreased from 39% to 38%); considerations in appointing or (re)appointing the external auditor (remained flat at 50%); and factors contributing to the selection of the audit partner (decreased from 17% to 16%).

The report concludes:

As the role of the audit committee continues to evolve, it is essential to maintain robust disclosures. Audit committees have an opportunity to re-evaluate their disclosures in light of the period of disruption that we are facing, to provide greater transparency to investors and other stakeholders about how the audit committee is fulfilling its oversight responsibilities. These disclosures ultimately enhance trust and instill confidence in the audit committee’s leadership.

– Dave Lynn