voluntary audit disclosures continue to grow

Voluntary Audit Disclosures Equals Greater Transparency

October 5, 2016

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Voluntary Audit Disclosures Continue to Grow

voluntary audit disclosures continue to growIn an article that looked at corporate audit disclosure practices, published by CFO Magazine, author Matthew Heller, cites an EY Report, stating, “… more companies are disclosing how they oversee and appoint external auditors and the reasons for changes in fees,” adding, “The percentage of companies that disclosed factors considered by the audit committee when assessing the qualifications and work quality of the external auditor increased by 50%, up from 42% in 2015.”

EY’s Center for Board Matters reviewed the proxy statements of Fortune 100 companies, verifying that firms are exceeding the minimum disclosure. Among the findings disclosed by the EY report is:

The audit committees of 82% of the companies explicitly stated that they are responsible for the appointment, compensation and oversight of the external auditor; in 2012, only 42% of audit committees provided such disclosures.

You can read the full EY report here: Audit Committee Reporting to Shareholders in 2016.

You will also want to read the full article that appeared on the CFO Magazine website. Voluntary Audit Disclosures Continue to Grow 

The report noted that over the past year, the SEC has taken a series of actions to consider whether and how to improve transparency around audit committees, audits and financial reporting more generally.

“The combined effect of these activities has been to increase engagement by issuers, audit firms, investors and other stakeholders in discussions about the current state of financial reporting-related disclosure as well as how it should change,” according to EY.

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