The role of the Audit Committee has for years been a discussion about internal controls over financial reporting (ICFR), the cost of audits and the general state of the finance function (CFO team). Over time, the role of the Audit Committee has morphed from compliance/reporting steward to active participant in assessing the effectiveness and efficiency of the finance function to achieve outcomes. It is a delicate balance of remaining independent of management decisions yet pushing for change to ensure better reporting and compliance to investors, lenders, and other stakeholders. The powers of the Audit Committee can be used to mandate change in the finance organization. The Audit Committee can have a much larger mandate. More to follow on this topic.
Audit committees are responsible for overseeing ICFR, including in connection with their consideration of management’s assessment of ICFR effectiveness and, when applicable, the auditor’s attestation.