Deloitte's report on voluntary audit committee disclosures based on its analysis of S&P 100 company fiscal 2018 proxy statements filed as of May 1, 2019, reveals these and numerous other noteworthy voluntary disclosure practices – many of which appear to be directly responsive to investor calls for greater transparency in particular areas:
- Most notably, discussion of the audit committee's role in cybersecurity oversight increased 15% year-over-year (YoY) – disclosed by 58% of companies in 2019. Of those, 51% delegate cyber risk responsibilities to the audit committee, while the balance share responsibility between the audit committee and either the full board or another board committee.
- Disclosure increased measurably YoY in these areas:
- 78% disclosed that the audit committee evaluates the independent auditor (up 7%).
- 55% disclosed reasons why the audit committee decided to reappoint the independent auditor (up 7%).
- 67% disclosed that the audit committee discusses with the independent auditor the scope of & plans for the audit (up 4%).
In addition to useful disclosure benchmarking data, the report suggests - with the aid of helpful examples from recently filed proxies - how companies can increase their transparency in particular areas (regarding, e.g., the audit committee's agenda, auditor evaluation criteria) to provide investors with a more informed view of the audit committee.
A summary at the end of the report displays the results of Deloitte's analysis for 30 disclosure topics over the past five years - revealing both the absolute number of companies that made particular types of disclosures each year, as well as the percentage changes from 2018 to 2019.
Access additional information & resources on our Audit Committees page. This post first appeared in the weekly Society Alert!