Blogs

The jointly-released CAQ/Audit Analytics annual "Audit Committee Transparency Barometer" reveals these - among many other - upticks in voluntary audit committee disclosure practices and associated examples of effective disclosure based on S&P 1500 proxy statements filed from July 1, 2018 - June 30, 2019:

• Relatively newer to the annual disclosure tracking is the topic of cybersecurity oversight. These findings illustrate the dramatic increases in disclosure:
• 34%, 26%, and 13% of S&P 500, S&P MidCap, and S&P SmallCap companies, respectively, disclosed in their 2019 proxies the audit committee's responsibility for cyber risk oversight - up from 11% (S&P 500), 5% (S&P MidCap), and 4% (S&P SmallCap) in 2016.
• 23%, 15%, and 7% of S&P 500, S&P MidCap, and S&P SmallCap companies, respectively, disclosed in their 2019 proxies whether the board has a cyber expert - up from 7% (S&P 500), 4% (S&P MidCap), and 3% (S&P SmallCap) in 2016.
• 22%, 14%, and 7% of S&P 500, S&P MidCap, and S&P SmallCap companies, respectively, disclosed in their 2019 proxies the committees on which the cyber expert serves - up from 7% (S&P 500), 4% (S&P MidCap), and 3% (S&P SmallCap) in 2016.
  See the sample disclosures on pages 13-14.
• 42%, 30%, and 22% of S&P 500, S&P MidCap, and S&P SmallCap companies, respectively, disclosed in their 2019 proxies the audit committee's considerations in (re)appointing the external auditor - up from 25% (S&P 500), 16% (S&P MidCap), and 11% (S&P SmallCap) in 2015. See the sample disclosures on pages 6-7.
• 50%, 39%, and 33% of S&P 500, S&P MidCap, and S&P SmallCap companies, respectively, discussed criteria the audit committee considered in its evaluation of the audit firm - up from 24% (S&P 500), 25% (S&P MidCap), and 22% (S&P SmallCap) in 2015. See the sample disclosure on pages 10-11.
• 29%, 19%, and 14% of S&P 500, S&P MidCap, and S&P SmallCap companies, respectively, disclosed that the evaluation of the external auditor is conducted at least annually (best practice) - up from 15% (S&P 500), 7% (S&P MidCap), and 7% (S&P SmallCap) in 2015. See the sample disclosure on pages 10-11, which also notes the audit committee's involvement in selection of the lead engagement partner - a fairly common disclosure practice among larger companies, but not among smaller companies, as detailed on page 12.