Accounting
Audit committees boost cyber, ESG expertise
Audit committees are bringing on more directors with experience in cybersecurity and sustainability, according to a new survey.
The
The survey also found an increase in environmental, social and governance, or sustainability, expertise on the boards of S&P 500 companies (59% in 2024, compared to 54% in 2023).
For the first time, the CAQ tracked disclosures of boards’ skills matrix. The majority of S&P 500 companies (85%) and S&P midcap companies (75%) disclosed the board of directors’ skills matrix.
However, the CAQ also saw disclosures level off in some areas instead of increasing. These included considerations in appointing or reappointing the external auditor, considerations of the length of tenure, and considerations around how the audit committee evaluates audit fees in relation to audit quality, which are all areas where investors are asking for more information.
“We continue to hear from investors that they want more transparency,” said CAQ CEO Julie Bell Lindsay in a statement. “They don’t just want boilerplate disclosures but detailed information that will help them understand the audit committees’ responsibilities and processes. While we are pleased to see that boards are increasingly disclosing information about new oversight areas and their expertise, we hope they will consider enhancing disclosures in some of the areas that have plateaued.”
Courtesy of the Center for Audit Quality
This year the CAQ observed that 50% of the S&P 500 included discussion of the audit committee considerations in appointing or reappointing the external auditor, which was up slightly from last year (49% of the S&P 500 in 2023). “While progress has been made in the last 11 years, this is an area where disclosures can continue to be enhanced,” said the report.
Audit firm tenure continues to be frequently disclosed by audit committees (73% of the S&P 500 in 2024), but fewer audit committees disclose how the length of tenure has been considered when reappointing the external auditor (13% of the S&P 500 in 2024).
“Solely stating the tenure of the audit firm is not enough; detailed disclosures demonstrate how the audit committee has carefully evaluated the positive and negative impacts of audit firm tenure on audit quality,” said the report.
In 2024, only 6% of the S&P 500 included disclosure related to a discussion of audit fees and its connection to audit quality.
“Audit fees that are too low may be indicative of poor audit quality, but audit fees that are too high could be the result of inefficiencies,” said the report. “Clear disclosures about how the audit committee evaluates audit fees in relation to audit quality highlight the audit committee’s commitment to promoting audit quality. This is also an opportunity for the audit committee to discuss how it drives efficiencies in the audit and is focused on not only the cost of the audit, but also the quality.”
“The Transparency Barometer continues to provide insights into the deliberations of audit committees and how they exercise their expanding responsibilities,” said Michael Nohrden vice president of strategy for Ideagen, in a statement. “It serves as an important tool for boards and the public to track and compare audit committee disclosures in the S&P 1500.”
Carr, Riggs & Ingram, a Top 25 Firm based in Enterprise, Alabama, has added CapinCrouse, a Regional Leader based in Indianapolis, effective Jan. 17, 2025.
The deal is CRI’s biggest merger in its history, and the first since it
CapinCrouse focuses on exclusively serving nonprofits, such as faith-based organizations and private colleges. The merger will add 40 partners, 185 professionals and 15 offices to CRI, which has 437 partners and 2,304 staff
After the outside investment, CRI split its attest and non-attest practices, as is common when accounting firms receive private equity or venture capital funding. Carr, Riggs & Ingram, L.L.C., as an independent licensed CPA firm, is providing assurance, attest and audit services. CRI Advisors, LLC (including its subsidiary entities) operates as a separate legal entity, providing clients with tax and business consulting services.
“This merger represents an exciting milestone in our firm’s history and a significant advancement for both CRI and CapinCrouse,” said CRI Advisors LLC chairman Bill Carr in a statement Tuesday. “We have previously invested in firms that specialize in serving faith-based organizations and private colleges. With the addition of CapinCrouse, CRI is now positioned to become the leading national provider in these vital markets. By combining our strengths, we will enhance the value we offer and greatly expand our national geographical presence. We are proud to welcome CapinCrouse to the CRI family.”
Financial terms of the deal were not disclosed. CRI ranked No. 24 on Accounting Today‘s 2024 list of the Top 100 Firms, with $455.36 million in annual revenue. CapinCrouse ranked No. 27 on Accounting Today‘s Regional Leaders list of the Top Firms in the Great Lakes region, with $35.51 million in annual revenue.
“We are very pleased to join CRI,” said Fran Brown, Managing Partner of CapinCrouse. “For over 50 years, our focus has been on providing innovative service to nonprofit organizations whose outcomes are measured in lives changed. CRI’s commitment to client service, respect, and integrity is an excellent fit with our mission and firm culture. We will continue to operate under the CapinCrouse brand and are excited to now have access to more offerings and resources to further drive exceptional client service.”
Koltin Consulting Group CEO Allan Koltin advised both firms on the merger. “It is interesting to note that this is CRI’s biggest M&A deal in its history, and it comes on the heels of their private equity deal with Centerbridge Partners and Bessemer Venture Partners,” he said in a statement. “CapinCrouse, a top 125 firm nationally, is viewed by many as the preeminent firm in the country when it comes to the audit and related advisory services of nonprofits and religious organizations. My intuition suggests that going forward, we will see CRI expanding its geographic reach nationally by combining with more top 200 firms.”
Last August, CRI added
In 2022, CapinCrouse acquired the
President Donald Trump named Mark Uyeda, a Republican member of the Securities and Exchange Commission, as acting chairman of the SEC, while confirmation hearings await for Trump’s official pick as chairman, Paul Atkins.
Uyeda has been an SEC commissioner since 2022 and a member of the staff since 2006. Last month, he
“I am honored to serve in this capacity after serving as a Commissioner since 2022, and a member of the staff since 2006,” Uyeda said in a statement Monday. “I have great respect for the knowledge, expertise and experience of the agency and its people. The SEC has a vital mission—protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation—that plays a key role in promoting innovation, jobs creation, and the American Dream.”
Last month, Trump
As acting chairman, Uyeda announced Monday that he would be launching a crypto task force dedicated to developing a comprehensive and clear regulatory framework for crypto assets. The task force will be led by another Republican commissioner, Hester Peirce.
The task force plans to collaborate with SEC staff and the public to set the SEC on a regulatory path as opposed to pursuing enforcement actions to regulate crypto “retroactively and reactively,” according to a
“This undertaking will take time, patience and much hard work,” Peirce said in a statement. “It will succeed only if the Task Force has input from a wide range of investors, industry participants, academics and other interested parties. We look forward to working hand-in-hand with the public to foster a regulatory environment that protects investors, facilitates capital formation, fosters market integrity, and supports innovation.”
The task force plans to hold roundtables in the future, but in the meantime is asking for public input at [email protected].
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