Deloitte's newly-released report on voluntary audit committee disclosures reveals these and numerous other noteworthy voluntary disclosure practices – many of which appear to be directly responsive to investors’ expectations/requests for greater transparency in particular areas - based on an analysis of S&P 100 company 2018 proxy statements filed as of May 31, 2018:
- Most notably, discussion of the audit committee's role in cybersecurity oversight increased 13% year-over-year (the greatest YoY increase) – disclosed by 43% of companies in 2018.
- Disclosure of the audit committee’s evaluation of the independent auditor ranked 2nd in terms of percentage increases - 10% YoY - disclosed by 71% of companies.
- 79% disclosed their audit firm's tenure – up 8% from last year.
- Up 7% from last year, 48% disclosed why the audit committee decided to reappoint the independent auditor.
- 81% provided disclosure of the audit committee’s consideration of changing or regularly rotating the independent auditor - a 6% increase from 2017.
- 78% of companies explicitly stated that the retention of the independent auditor is in the best interest of the company and its shareholders (1% increase from 2017). Common considerations taken into account by the audit committee and cited in the proxy include:
- External data relating to audit quality and performance of the firm and its peers - Firm independence
- Appropriateness of fees - Familiarity with the company’s business operations, accounting policies, and ICFR - Firm’s industry expertise - Impact to the company of changing auditors
Although disclosures decreased slightly or were flat in a handful of areas compared to 2017, disclosures in 80% of the categories increased over 2017.