ACIS Researchers Dr. Sarah Stein & Dr. Kim Walker Explore How Audit Committees Are Evolving to Meet New Needs
April 11, 2025
The Accounting and Information Systems department would like to highlight a recent research publication by Dr. Sarah Stein and Dr. Kim Walker. Along with coauthors Dr. Lauren Cunningham (University of Tennessee) and Dr. Karneisha Wolfe (University of Illinois and a Virginia Tech PhD Graduate), Stein and Walker have published a new study in The Accounting Review titled “Redefining Perceived Boundaries: Insights into the Audit Committee’s Evolving Responsibilities.”
Oversight responsibilities for many audit committees are evolving to include some of the hottest topics in the boardroom, including cybersecurity and risk management. However, certain audit committees avoid overseeing these evolving areas, creating significant variation across boards in the assignment of responsibilities.
Using qualitative methods, the research team conducted interviews with audit committee members from U.S. public companies to better understand how audit committees navigate these evolving responsibilities. Their analysis highlights the following distinct approaches employed by audit committees:
● Proactively Taking on New Responsibilities: Audit committees who proactively sought out new responsibilities pointed to their personal expertise or a personal desire to keep up with emerging business practices, which can leave the committee exposed if they fail to account for these traits during succession planning.
● Reluctantly Accepting New Responsibilities: The research team also encountered audit committees who took on the additional responsibilities reluctantly and who failed to proactively seek out opportunities to improve their expertise related to the evolving topics.
● Maintaining Current Responsibilities: A final group of audit committees in the study included those pushing back on evolving responsibilities as they cite concerns about workload and the risk of slipping in their core responsibility for financial reporting oversight. This approach leaves the board in a position of either finding another committee or retaining oversight at the full board level.
The research highlights the critical importance of obtaining board member buy-in for these evolving roles. Without consensus and collaboration, it becomes increasingly difficult for audit committees to ensure effective oversight.
This work not only contributes to the academic understanding of audit committee functioning but also provides practical insights for those in the corporate governance field. The research has been summarized in a practitioner-friendly version, published in partnership with the Center for Audit Quality, which provides a more accessible overview for professionals interested in the implications of this research.
The full academic study can be accessed here: https://doi.org/10.2308/TAR-2023-0474
For a practitioner-focused summary, visit: https://www.thecaq.org/ac-kitchen-sink
We congratulate Dr. Sarah Stein, Dr. Kim Walker, and their coauthors for this impactful contribution to the field of corporate governance.