Audit committees are disclosing more information about their auditors and audits in shareholder reports this year, according to an annual analysis from the EY Center for Board Matters. Ernst & Young found a dramatic increase in disclosures in most categories over the last eight years, Accounting Today reports.
Audit committees are responding to the increasing complexity of risks by expanding the number of financial experts within their ranks, with 91 percent of committees having two or more financial experts, up from 70 percent in 2012. These committees are also overseeing a broader range of risk types, including cybersecurity, data privacy, enterprise risk management, health, safety, environmental, social, and governance.
Nearly four in five companies disclosed that the audit committee is involved in selecting the lead audit partner, and 64 percent disclosed the factors used in the audit committee’s assessment of the external auditor’s qualifications and work quality. In accordance with new Public Company Accounting Oversight Board (PCAOB) standards, 21 percent of companies studied provided voluntary disclosures of critical audit matters (CAMs). 