Audit Committee

The Evolving Audit Committee

Audit committees are recognized as the cornerstone of a successful and credible financial reporting system and both the demands placed on them and the expectations of them continue to increase exponentially.
 
 Before the credit crisis hit, audit committees already had a broad scope of responsibilities, largely mandated by the Sarbanes-Oxley Act in the United States and the Canadian Securities Administrators’ National Instrument 52-110 Audit Committees in Canada. In today’s climate, limiting the audit committee’s scope to regulatory requirements simply isn’t sufficient. To stay one step ahead of this economy in flux, audit committees need to ask new questions, and add new areas of focus.
 
 To weather the current economic storm, companies are going to need strong leadership not just from management, but from their audit committees. While organizations can’t control how their banks, suppliers and customers will manage in these volatile times, they can control how they’re monitoring the ripple effects of this crisis within their own organization. Expanding the audit committee’s field of vision, clearly defining who’s tracking the company’s risk radar, and taking a step back to re-evaluate if the company has the right leader at the helm of their audit committee are three solid steps every organization should consider.