Redefining Perceived Boundaries: Insights into the Audit Committee's Evolving Responsibilities

The Accounting Review (forthcoming)

52 Pages Posted: 28 Nov 2022 Last revised: 20 Feb 2025

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

Karneisha Wolfe

University of Illinois at Urbana-Champaign

Date Written: February 07, 2025

Abstract

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 avoid overseeing these evolving areas, creating significant variation across boards in the assignment of responsibilities. In this study, we seek to understand how ACs respond when environmental changes create new evolving risks that may extend the boundary of their traditional domain. To do so, we interview a diverse set of 29 AC members from U.S. publicly traded companies. We analyze our data through the theoretical lens of collaborative boundary work to identify how ACs respond by extending, blurring, or maintaining their perceived oversight boundaries, the related implications of these decisions, and their key tactics employed to manage AC workload. Our findings should be of interest to boards, investors, and regulators tasked with monitoring AC effectiveness.

Keywords: audit committee, corporate governance, evolving responsibilities, boundary work, boundary tactics

JEL Classification: G34, M14, M41, M42

Suggested Citation

Cunningham, Lauren M. and Stein, Sarah E. and Walker, Kimberly and Wolfe, Karneisha, Redefining Perceived Boundaries: Insights into the Audit Committee's Evolving Responsibilities (February 07, 2025). The Accounting Review (forthcoming), 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

Karneisha Wolfe

University of Illinois at Urbana-Champaign ( email )

Champaign, IL
United States

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