Enterprise Risk Management Takes the Lead, AI Governance Gains Urgency for Audit Committees: Deloitte, Center for Audit Quality Survey

What: The fifth edition of the "Audit Committee Practices Report," a joint initiative of Deloitte's Center for Board Effectiveness and the Center for Audit Quality (CAQ), provides audit committee members and governance professionals with a benchmark for priorities and peer practices in the year ahead.Who: Krista Parsons, Audit Committee Program leader, Center for Board Effectiveness, Deloitte & Touche LLP; and Vanessa Teitelbaum, senior director, Professional Practice, Center for Audit QualityWhen: September 22 at 8 a.m. ESTWhere: https://www.deloitte.com/us/en/programs/center-for-board-effectiveness/articles/audit-committee-report.htmlDetails: The latest "Audit Committee Practices Report" highlights how audit committees are balancing their foundational responsibilities with an expanding oversight agenda shaped by emerging risks, cybersecurity, AI governance and expectations for stronger engagement. Based on close to 250 survey responses from audit committee chairs and members, this year's report examines not only where oversight responsibility resides, but also whether committees feel equipped with the confidence, visibility and experience needed to oversee these areas effectively.Highlights from the report: Emerging risks reshape priorities: More than half of respondents (54%) say their audit committee has grown more focused on emerging risks over the past year. More broadly, enterprise risk management emerged as the No. 1 priority for audit committees, according to survey responses. Cybersecurity oversight calls for agility: Cybersecurity shows up most often among audit committees' top three priorities. Most audit committees overseeing cybersecurity feel confident in their ability to provide oversight (82%). However, the rapidly changing cybersecurity landscape requires sustained attention as committees work to keep pace with the evolving risk profile. A gap between AI responsibility and readiness: Seventy-five percent of respondents identified AI governance as a top three priority, up significantly from 35% last year, and 70% cited technology (including AI) as the top skill needed to enhance audit committee effectiveness. However, only 56% of respondents are confident in their audit committee's ability to effectively oversee AI governance. Engagement and consistency set the standard: Higher-quality discussion and challenge in meetings ranked as the top-rated opportunity to enhance audit committee effectiveness, cited by 41% of respondents. Engagement team leadership, experience and continuity was the top overall response for what audit committees value most when assessing the quality and performance of the independent auditor. Key quotes:"Audit committees are entering a new era of oversight — one defined by fast-moving risks and an expanded agenda. The committees that are likely best positioned to lead through that change are not just identifying what is emerging; they are clarifying responsibilities, strengthening communication and building the capabilities needed to keep pace with change."— Krista Parsons, Audit Committee Program leader, Deloitte's Center for Board Effectiveness, Deloitte & Touche LLP"The audit committee's core responsibility remains oversight, but the environment around that responsibility continues to evolve. As risks grow more interconnected and new areas of focus emerge, audit committees must regularly evaluate whether they have the structure, expertise and engagement needed to fulfill that role effectively."— Vanessa Teitelbaum, senior director, Professional Practice, Center for Audit Quality

Enterprise Risk Management Takes the Lead, AI Governance Gains Urgency for Audit Committees: Deloitte, Center for Audit Quality Survey

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