Deloitte updates audit committee guide

Deloitte has revamped its Audit Committee Guide, with new tools and resources on committee requirements, oversight responsibilities and strategies for promoting effectiveness, along with questions that committees can consider asking to drive discussions.

The online guide, which was released in September after last being updated in 2018, aims to help veteran and new audit committee members alike, along with people who work closely with audit committees, such as CFOs, controllers, chief audit executives, general counsel, corporate secretaries and independent auditors. 

The guide covers topics such as how audit committees can carry out their responsibilities to oversee various aspects of financial reporting, risk, internal auditors, independent auditors, and ethics and compliance. It also describes to what extent committee composition meets the requirements of the Securities and Exchange Commission, the New York Stock Exchange and Nasdaq when it comes to independence and financial literacy. The document also discusses how an audit committee’s charter matches its current listing requirements, particularly as the committee’s responsibilities may have shifted in recent years. Other topics include common practices and considerations when it comes to performing committee evaluations and self-assessments, as well as how audit committees can bolster their overall effectiveness.

“The way we look at the guide is that it’s really a comprehensive resource that either an audit committee member or somebody who works with them can pick up and have a manual of what it is that an audit committee does,” said Krista Parsons, audit and assurance managing director and audit committee program leader at the Center for Board Effectiveness at Deloitte & Touche LLP. “Also we have PCAOB requirements that may be relevant to an audit committee. All the requirements are in there, as well as the general roles and responsibilities of the committee. In addition to that, we also include leading practices that we see in our work, as well as questions that audit committees can consider asking in relation to the specific areas of responsibility that they have. Then we also include some tools and resources that they can use in their practice.”

She distinguishes Deloitte’s guide from audit committee guides and resources from the Public Company Accounting Oversight Board and the Center for Audit Quality.

“One thing that differentiates ours is we work across a broad range of companies,” said Parsons. “We do include those requirements, but then we also include some of the learnings that we have working across a broad range of companies and industries. All of that is incorporated into the document from across the client base that we serve.”