Audit Committees: Smart Questions And Smart Answers
This article focuses on the audit committees of the major corporations of the U.S. Today audit committees rely heavily on input from management and auditors to perform their oversight duties. What the audit committee members have failed to realize is that, while they had asked all the right questions, they did not properly consider the answers. In particular, they had not carefully evaluated whether management and the auditors were credible, nor had they critically evaluated the quality of answers to specific questions. Expectations of audit committee members have risen dramatically, as the spate of accounting scandals created a new environment in financial reporting and corporate governance.