Insights into the Evolving Responsibilities of the Audit Committee

55 Pages Posted: 28 Nov 2022 Last revised: 4 Jun 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

Virginia Tech

Date Written: June 2, 2023

Abstract

Over the past two decades, many audit committees (ACs) have seen their oversight responsibilities evolve to include some of the hottest topics in the board room: enterprise risk management; cybersecurity and data privacy; and environmental, social, and governance reporting. At the same time, other ACs pushed back on their boards and actively avoided these evolving areas due to concerns about insufficient ability to focus on their primary oversight responsibilities related to financial reporting, external and internal auditors, and internal controls. To better understand why some ACs accept these evolving oversight responsibilities while others do not, we interview a diverse set of 29 ACs from publicly traded companies in the U.S. We analyze ACs’ helping behaviors 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. 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 (June 2, 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

Virginia Tech ( email )

Blacksburg, VA
United States

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