Looking ahead to 2025

Serving on an audit committee in 2025 might be daunting even if the committee could be assured that it would not have to take on any added responsibilities in the new year.

With the change in administration, we could see significant changes in regulatory priorities, financial reporting, and corporate governance. Additionally, the increasing use of generative artificial intelligence (GenAI), ongoing cybersecurity threats, and a renewed focus on enterprise risk management (ERM) at a time of geopolitical uncertainty will likely keep audit committees busy. And to the extent that companies face unanticipated risks and challenges, it seems almost inevitable that audit committees will be viewed as the default “home” for such developments.

Given this background, audit committees would be well advised to consider a wide variety of continuing and emerging issues that they may need to deal with in 2025, including but not limited to:   

• The impact on regulation with the shift in administration.
• Securities and Exchange Commission rulemaking activities, including rules regarding climate-related disclosures and the use of projections in disclosures.
• The Public Accounting Oversight Board priorities and engaging with their independent auditors regarding their specific inspection results.
  
• The impact of GenAI and the continuing threat of cybersecurity incidents.
  
• ERM and the assessment of the ERM program to assess that it remains effective.
  
• Audit committee effectiveness and the use of technology to enhance it.

While these topics represent a small portion of the audit committee’s responsibilities, they illustrate that none of those responsibilities can be dismissed or minimized, despite the seemingly constant addition of new issues and priorities. Those new matters also suggest that audit committees need to be vigilant about their composition and leadership through succession planning and robust self-assessment to ensure they have effective and efficient representation at the table to address the committee’s critical tasks.