First few Article Sentences
Responsibilities of audit committees have increased significantly over the past 20 years. Although some committees have shifted to accommodate new structures and operations, many have been slow to embrace the increase in roles and responsibilities, leaving them vulnerable to shareholder and stakeholder scrutiny.
The most dramatic changes occurred in 2002 with the passage of the Sarbanes-Oxley Act (SOX), which set the requirements of public company audit committees, including preapproving audit and nonaudit services, overseeing auditor engagement, convening with auditors to share information on critical accounting policies, and ensuring their audit committee included a “financial expert,” among other things. Because SOX didn’t involve nonpublic companies, several states have enacted legislation of their own.