SEC considers updating audit committee disclosure requirements

The SEC is evaluating whether audit committee disclosure requirements provide investors with the information they are seeking.

The commission voted Wednesday to publish a concept release that seeks public comment about the relationship between the audit committee and the independent auditor. The release asks whether the information provided to investors about the audit committee’s responsibilities and activities can be enhanced.

The concept release also requests comments on whether the SEC’s disclosure requirements should be changed to provide more insight into the information the audit committee considered in overseeing the independent auditor.

This would include considerations related to the process for appointing or retaining the auditor, and the qualifications of the auditor and certain members of the engagement team.

“Effective audit committee oversight is essential to investor protection and the functioning of our capital markets,” SEC Chair Mary Jo White said in a news release. “The way audit committees exercise their oversight of independent auditors has evolved, and it is important to evaluate whether investors have the information they need to make informed decisions.”

Comments will be accepted for 60 days following publication of the concept release in the Federal Register.

—Ken Tysiac (ktysiac@aicpa.org) is a JofA editorial director.