Current Developments for Audit Committees 2003

Overview: Boards’ and audit committees’ expanding responsibilities pose significant challenge for directors. They already are finding that concerns about time commitments, liability, and reputation are making recruiting new members increasingly difficult. Audit committee members look at the breadth of their new responsibilities, questioning whether their plates are too full, and whether they can reasonably be expected to have sufficient time and capability as an oversight body to do all that’s expected. Some audit committee members and candidates are considering whether they want to accept being designated the “financial expert.” Another risk that some audit committees, and boards, inadvertently or otherwise will take a “checklist approach” to fulfilling their duties, checking the boxes but not really effectively carrying out the substance of what the rules expect. The new rules will further focus audit committee attention on overseeing the external auditor’s activities, with more in-depth probing and discussion of significant accounting, auditing, and financial reporting issues. Committees will need to routinely evaluate and approve in advance both audit and non audit services, playing a direct role in overseeing auditor independence.

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Format: PDF | Size: 2,580KB | Date: Jan 2003 | Pages: 90