Deloitte Updates Audit Committee Guide to Meet Evolving Risk Landscape and Regulatory Environment

NEW YORK, September 7, 2022

Key takeaways:

• Increasingly, additional responsibilities are falling to the audit committee, including cybersecurity and environmental, social, and governance (ESG) reporting. According to the “Audit Committee Practices Report,” a survey conducted by Deloitte and the Center for Audit Quality finds audit committees are being challenged by increased complexity in their core responsibilities as well as scope creep across other areas within their organizations.
• Deloitte has updated, modernized, and digitized its “Audit Committee Guide” to provide up-to-date resources and insights on how audit committee members can perform their duties effectively.
• Deloitte’s “Audit Committee Guide” provides access to the latest tools and resources regarding committee requirements, oversight responsibilities and strategies for promoting effectiveness. It also features questions that committees can consider asking to drive candid discussions.
• The guide is useful for veteran and new audit committee members alike, as well as those who work closely with audit committees, CFOs, controllers, chief audit executives, general counsel, corporate secretaries, and independent auditors.

Deloitte launched an enhanced and digitized version of its “Audit Committee Guide” today. Last published in 2018, Deloitte’s “Audit Committee Guide” provides a first-hand look at the latest requirements and an explanation of the shifting roles and responsibilities of audit committee members, especially in emerging areas such as environmental, social and governance issues, including cybersecurity. While the guide is focused on requirements for public companies based in the United States, much of the content can be leveraged by those serving on non-public company audit committees. Each section within the “Audit Committee Guide” also features questions that committees can consider asking to promote constructive dialogue on a variety of topics.

Additional oversight responsibilities are falling to the audit committee. According to a survey conducted by Deloitte and the Center for Audit Quality, audit committees are being challenged by increased complexity in their core responsibilities as well as scope creep across other areas within their organizations.

The enhanced “Audit Committee Guide” can serve as a resource on a multitude of topics of interest to committee members, such as:

• How audit committees can fulfill their responsibilities to oversee the many aspects of financial reporting, risk, internal auditors, independent auditors, and ethics and compliance.
  
• To what extent committee composition meets the requirements of the SEC, NYSE, and Nasdaq with respect to independence and financial literacy.

• How an audit committee’s charter aligns with current listing requirements, especially as the committee’s responsibilities may have shifted in recent years.

• Common practices and considerations with respect to performing committee evaluations and self-assessments.

• How committees can improve their overall effectiveness.

Key quotes

As the role of the audit committee continues to expand, it’s important for audit committees to clearly understand their responsibilities and prioritize their agendas. The SEC’s disclosure proposals in areas such as cybersecurity and climate are positioned to dramatically increase the volume of information required in corporate reporting, which falls within the audit committee’s area of responsibility. The ‘Audit Committee Guide’ can help audit committees and those who work with them keep pace on these rapidly evolving requirements.

—Krista Parsons, Audit & Assurance managing director, Audit Committee Program Leader, Center for Board Effectiveness, Deloitte & Touche LLP

Deloitte’s Center for Board Effectiveness has updated, digitized and enhanced the ‘Audit Committee Guide’ to provide audit committees with the latest tools and resources for understanding their requirements and oversight responsibilities. The guide also offers suggestions for enhancing committee effectiveness during this time when regulatory requirements are evolving rapidly. Given the critical role audit committees play in protecting investors and the health of the capital markets, it is important that they stay on top of the latest developments and have the latest tools and resources to operate effectively.

—Maureen Bujno, Audit & Assurance managing director, Audit & Assurance governance leader, Center for Board Effectiveness, Deloitte & Touche LLP

Deloitte’s “Audit Committee Guide” and supporting documents will be updated regularly to reflect evolving guidance and leading practices. To access the full guide, please visit here.

About Deloitte

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