CAQ Releases Audit Committee Practices Report

The Center for Audit Quality (CAQ), in coordination with Deloitte’s Center for Board Effectiveness, has released the fifth edition of its audit committee practices report, which “offers audit committee members and governance professionals a practical benchmark for peer practices and insights for setting priorities in the year ahead.” The report is based on feedback from a survey of 248 respondents from audit committees, particularly those on the boards of U.S. public companies that have at least $2 billion in market capitalization.

New to this year’s edition are, among other things, (1) an increased focus on whether audit committees feel ready to provide oversight in the areas they are responsible for and (2) additional questions related to artificial intelligence (AI). Key takeaways from the survey include the following:

• Enterprise risk management was the highest priority for audit committees “for the first time since the survey’s inception,” while cybersecurity was the most frequently cited concern among committees’ top three topics.
• Although AI governance was frequently cited as a priority, many audit committees expressed limited confidence in their readiness to provide oversight in this area.
• Audit committees highlighted the importance of “high-quality, consistent communication and engagement” to improving their own effectiveness as well as evaluating the performance of auditors.