On the 2024 audit committee agenda

The business and risk environment has changed dramatically over the past year, with greater geopolitical instability, surging inflation, high interest rates, and unprecedented levels of disruption.

Audit committees can expect their company’s financial reporting, compliance, risk, and internal control environment to be put to the test by an array of challenges—from global economic volatility and the wars in Ukraine and the Middle East to cybersecurity risks and ransomware attacks and preparations for US and global climate and sustainability reporting requirements, which will require developing related internal controls and disclosure controls and procedures.

Drawing on insights from our interactions with audit committees and business leaders, we highlight eight issues to keep in mind as audit committees consider and carry out their 2024 agendas:

• Stay focused on financial reporting and related internal control risks—job number one.
• Clarify the roles of management’s disclosure committee and ESG teams and committees in preparations for new US, state, and global climate and other sustainability disclosures—and oversee the quality and reliability of the underlying data.
• Monitor management’s preparations for and compliance with the SEC’s cybersecurity rules.
• Define the audit committee’s oversight responsibilities for generative artificial intelligence (AI).
• Focus on leadership and talent in the finance organization.
• Reinforce audit quality and stay abreast of proposed changes to PCAOB auditing standards, including its proposal relating to noncompliance with laws and regulations.
• Make sure internal audit is focused on the company’s key risks—beyond financial reporting and compliance—and is a valued resource to the audit committee.
• Help sharpen the company’s focus on ethics, compliance, and culture.