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The CAQ and Ideagen Audit Analytics recently issued the 2024 edition of their “Audit Committee Transparency Barometer,” which assesses audit committee trends and disclosure practices.  The report says that cybersecurity oversight will be a high priority issue for audit committees during the upcoming year, and that disclosures about cyber oversight are expected to become more robust. Here’s an excerpt:

The cybersecurity landscape has changed dramatically in recent years. Cybersecurity incidents are on the rise and the costs associated with a cybersecurity incident are also increasing. In the CAQ and Deloitte joint Audit Committee Practices Report, 69% of audit committee respondents indicated that cybersecurity will be in the top three priority areas for the audit committee in the next 12 months, and 30% ranked cybersecurity as the number one priority for the audit committee in that period.

Additionally, with the SEC Cybersecurity Disclosure Rule in full effect, certain cybersecurity information is required to be included in SEC filings. Further, per the CAQ 2024 Audit Partner Pulse Survey, 47% of audit partners expect to see companies in their primary industry sector voluntarily increasing or enhancing cybersecurity disclosures over the next 12 months.

The report says that consistent with this expectation, more boards are disclosing that they have a cybersecurity expert (60% of the S&P 500 in 2024, compared to 51% in 2023). It also says that in today’s complex & evolving threat environment, boards and audit committees need to stay current through education and training in order to effectively oversee corporate cyber risk management efforts.

The report also addresses disclosure practices with respect to director skills, auditor oversight and tenure, the relationship between audit fees and audit quality, and board oversight of ESG issues.

– John Jenkins