Insights into the Evolving Responsibilities of the Audit Committee

54 Pages Posted: 28 Nov 2022 Last revised: 19 Aug 2023

See all articles by Lauren M. Cunningham

Lauren M. Cunningham

University of Tennessee - Haslam College of Business

Sarah E. Stein

Virginia Tech

Kimberly Walker

Virginia Tech; affiliation not provided to SSRN

Karneisha Wolfe

University of Illinois at Urbana-Champaign

Date Written: August 19, 2023

Abstract

The oversight responsibilities for many audit committees (ACs) are evolving to include some of the hottest topics in the boardroom: enterprise risk management; cybersecurity; and environmental, social, and governance reporting. However, certain ACs have pushed back on their boards and actively avoided oversight of these evolving areas, forcing boards to assign oversight elsewhere. To better understand why some ACs accept these evolving oversight responsibilities while others do not, we interview a diverse set of 29 ACs from U.S. publicly traded companies. We analyze our data through the theoretical lens of organizational citizenship behavior to identify reasons for the significant variation across companies. In subsequent analysis, we examine strategies that ACs adopt to manage their increased workload and whether they vary based on ACs’ accepted responsibilities. Our findings should be of interest to boards, investors tasked with evaluating AC performance, and regulators involved in rulemaking related to board committee workloads.

Keywords: audit committee, corporate governance, evolving responsibilities, organizational citizenship behavior (OCB), proactive and reactive helping

JEL Classification: G34, M14, M41, M42

Suggested Citation

Cunningham, Lauren M. and Stein, Sarah E. and Walker, Kimberly and Wolfe, Karneisha, Insights into the Evolving Responsibilities of the Audit Committee (August 19, 2023). Available at SSRN: https://ssrn.com/abstract=4249507

Lauren M. Cunningham (Contact Author)

University of Tennessee - Haslam College of Business ( email )

Accounting and Information Management
603 Stokely Management Center
Knoxville, TN 37996
United States

Sarah E. Stein

Virginia Tech ( email )

250 Drillfield Drive
Blacksburg, VA 24061
United States

Kimberly Walker

Virginia Tech ( email )

250 Drillfield Drive
Blacksburg, VA 24061
United States

affiliation not provided to SSRN

Karneisha Wolfe

University of Illinois at Urbana-Champaign ( email )

Champaign, IL
United States

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