Audit Committee of the Future – From the CAQ

Below is a link to a paper by the Center for Audit Quality entitled The Audit Committee of the Future. Although the discussion paper is a disappointment (too basic, and lack of meaningful insight) as the CAQ usually has worthwhile materials, in the list of five ways to enhance the audit committee, I thought that one of the five ways is worth noting for its subject matter (but again, not for the discussion insight). The following is the discussion about fostering robust communication and engagement:

“Fostering robust communication and engagement: In addition to enhancing communication with investors and other parties via disclosure, panelists agreed that audit committees need to focus strongly on developing healthy channels of internal communication. “That’s an important skill set for the chairman of the audit committee,” said one, “how to make sure you’re having those periodic meetings outside the boardroom with the auditor, with the internal auditor, with the CFO, with the controller.” Of course, the onus on fostering communication does not fall on the audit committee chair alone. “It’s important to have all parties around the table fully engaged,” said one participant. Others emphasized the need for external auditors to engage in dialogue, particularly if a sense emerges that the audit committee is not asking the right questions. “You need an audit firm to speak up,” said a panelist.”

Obviously the above comments can be expanded upon greatly, including, for example, discussions about agenda setting, risk management and internal controls, critical decision making processes, investigations, and follow up.

Here is a link to the CAQ paper

Click to access caq_insights_audit_committee_future.pdf

And the following is a link to Tate’s Excellent Audit Committee Guide, updated January 2016. Enjoy. CLICK HERE FOR THE POST CONTAINING A LINK TO THE AUDIT COMMITTEE GUIDE

Best, Dave Tate, Esq., San Francisco and California,

Audit Committee 5 Lines of Defense 02132016 David W. Tate, Esq.