When considering their 2008 agendas, audit committees should...
1. Be a catalyst for improving risk management and oversight. Risk management, and the role of the audit committee and board in its oversight, continues to be a front-burner issue, particularly for companies potentially affected by the subprime credit crisis. Given the importance of risk management to the company's financial reporting and disclosure processes, the audit committee can be a catalyst in identifying important gaps in the company's risk management processes, and in helping to ensure coordination of the oversight activities of the full board and its standing committees in this area.
2. Closely monitor management's disclosure committee. The subprime credit problem is likely to result in greater focus on the adequacy of company disclosures. Considering the important role of management's disclosure committee in supervising the company's disclosure processes and ensuring the adequacy of its disclosures, audit committees need to monitor closely the activities of the disclosure committee, making sure that the communications and reports are adequate. Consider face-to-face meetings with leaders of the disclosure committee.
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