Audit Committee Disclosures Make Strides in Shareholder Engagement

Audit Committee Transparency Barometer

The latest report from the Center for Audit Quality (CAQ) reveals great strides in audit committee disclosure—a win for both boards and shareholders.

According to the CAQ’s 2016 Audit Committee Transparency Barometer, audit committees are voluntarily disclosing more information in the proxy related to external auditor oversight. A few key topics of improvement include: (1) Considerations in appointing the audit firm, (2) Audit committee’s role in determining audit firm compensation, and (3) Criteria used when evaluating the external auditor

Of course, this improved engagement from audit committees is most likely a response to rising pressure from investors and regulators. With an upswing in shareholder activism, boards are committing to improve their communication related to governance decisions and strategies for long-term growth. Our Investors Board Performance Review series was created specifically to bridge the shareholder engagement gap between boards, major institutional investors, and proxy advisors; reports like the CAQ’s Transparency Barometer demonstrate that the gap is indeed narrowing.

Percentage Disclosing Their Considerations in Appointing the Audit Firm
CAQ's Audit Committee Transparency Barometer

The 2016 CAQ Transparency Barometer shares audit committee insights from the Standard & Poor’s (S&P) Composite 1500, which is comprised of the S&P 500 large-cap companies (S&P 500), the S&P MidCap 400 (S&P MidCap), and the S&P SmallCap 600 (S&P SmallCap). Don’t miss the full report here.

Download: CAQ’s Audit Committee Transparency Barometer

CAQ Transparency Barometer

This annual report reveals double-digit growth since 2014 in the percentage of S&P 500 companies disclosing information on key areas of external auditor oversight—including auditor appointment and audit partner rotation. Learn more…

Download Here